Over the years, there has been a steady decline in the market share of MNCs in the Indian Pharmaceutical Market (IPM), a trend that is becoming more pronounced in recent times.
Let us delve deeper to understand the reasons for this trend
– MNCs primarily focus on global strategic patented prescription products mandated by their headquarters. Consequently, local affiliates adhere to those guidelines, resulting in a progressive decline in the sales of non-patented prescription products.
– There are significant differences in the relative product costing between MNCs and domestic companies for the same non-patented prescription products, exacerbating the situation for MNCs.
– Some MNCs based on the mandate from headquarters are divesting their off-patented prescription and consumer health products, which is further contributing to the lowering of their market share.
– On the contrary, domestic companies exhibit greater aggressiveness in the marketplace and generate better profits from products that MNCs have divested.
– Moreover in an effort to address marketing weaknesses, some MNCs also engage in co-marketing their patented products with domestic companies ensuring supplies of bulk happening from the parent company
These are some of the key reasons for the declining market share of MNCs in India.
It appears that in the foreseeable future, MNC operations in India will move towards only licensing their prescription patented products to domestic companies as there seems a gap in terms of understanding the domestic market realities
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