By Ishant Gupta
Indian pharmaceutical market sales reported a fall of 5.5% in 2017, the lowest in eight years, as the industry struggled to recover from the impact of the newly approved goods and services tax, falling exports due to lapses of approval by the United States Federal Drug Administration and increased competition from generic drugs from China and Vietnam. As sales continue to decline, pharmaceutical companies have been adopting modern marketing techniques and aiming to make profits through over the counter (OTC) sales. However, the rise of the OTC market could have a very negative and dangerous impact on the health of the Indian consumer who continues to self-prescribe unaware of the health risks.
Decline of the prescription drug market
The rise of the OTC market is directly linked to the fall of the prescription drug market which has encountered several tough blows over the past few years. In the post GST period, manufacturing costs for pharmaceutical firms have skyrocketed. Firms are unable to pass on increased costs to customers, but due to government caps on prices of medications, pharmaceutical companies are forced to reduce profit margins to absorb increased costs. Additionally, firms are also suffering due to increased competition from firms abroad, as pharmaceutical companies often don’t have brand name recognition when it comes to prescription drugs, prices are the only major selling point, making it harder for firms to survive.
Rise of OTC sales
OTC medicines are essentially any forms of medication that can be bought without a prescription and is usually bought by a person as per his/her discretion. For instance, pro-biotic healthcare products like Yakult or supplemental vitamins are often purchased without any prescription, but out of awareness.
Research conducted by doctor-patient end-to-end communication platform, Lybrate illustrates that over 52% of Indians engage in self-medication, thereby, explaining the rise in demand for OTC medications. Companies across the country are shifting focus to OTC medications to take advantage of this surge in demand. Lupin, the second largest company in the prescription drug market in India in terms of market capitalization, announced in January that it will be relaunching its laxative Softovac in the OTC space, and aims to achieve Rs 3 billion in sales from the segment over the next five years.
Other companies, including Sun Pharmaceutical Industries, and Cipla, have already made a foray into the OTC market. In an interview with Business Standard, Anantha Nayak, CEO of Cipla’s consumer health division said, “We are growing at a healthy rate.”
A Nicholas Hall report in 2017 pegged the OTC market in India at about Rs 188.6 billion for 2016 and its expected to grow at 9% every year reaching a whopping Rs 441.1 billion by 2026.
Lybrate’s survey points out that people very often go “online to search about possible options of medicines for their health problems,” which has prompted companies targeting the OTC market to seek collaborations with various self-medication apps such as Carezone and Doctor on Demand, to market their products.
The problem with self-prescribing medicines
It seems clear that pharma companies are focusing their energies on the OTC sector to keep up their sales and profits, however, in order to be successful in the sector, they need wide-scale distribution, and FMCG advertising and marketing skills. The pharma industry is trying to establish customer relationship and brand loyalty as a way to tackle the uncertain policy requirements and stagnant growth rates.
However, it is important to remember that although the OTC sector is rising, this could have a very negative impact on the general health and wellbeing of people due to the dangers of self-medication. Dr. (Prof) Jagdish Prasad, Directorate-General of Health Services, Ministry of Health and Family Welfare, said in an interview with the Hindu, “In India, self-medication undoubtedly is a big problem. People do not check with doctors before taking a pill in cases of minor health problems.” He added, “They take medicines on their own, forgetting that this might have adverse effect on their health.”
In order to promote awareness about self-medication, Lybrate launched a campaign last week ‘Say No to Self Medication’. Self-prescribing medications make our bodies resistant to antibiotics, and can also cause a plethora of health problems, including liver damage, ulcers, miscarriages, strokes and several others.