INDIAN PHARMACEUTICAL INDUSTRY – An Overview

During the current year 2009-10, Pharma was among the few sectors that managed

to expand its revenues despite global recession and financial crises. Strong

domestic demand, growing preference for generics worldwide and favorable rupee-

dollar exchange rate helped the Indian Pharmaceutical sector. Aggregate income of

the drugs and pharmaceuticals companies for the first two quarters of the current

year grew by 13 per cent and 7.8 percent respectively as compared to previous year.

As per Centre for Monitoring Indian Economy (CMIE) ,the estimated growth in

aggregate income for the next two quarters is 9.5 per cent and 10.2 percent

respectively.

The Indian pharmaceuticals industry has grown from a mere US$ 0.32 billion

turnover in 1980 to approximately US$ 21.26 billion in 2009-10.The country now

ranks 3rd in terms of volume of production (10% of global share) and 14th largest by

value.

Growth of Indian Pharmaceutical Industry from 2002-03 to 2008-09 are given in table

below:

Figures in Rs Crore

  2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Domestic Market 30365 32575 34128 39989 45367 50946 55454

Exports 12826 15213 17857 22216 24942 30760 38433

Imports 2865 2956 3139 4515 5867 6734 8552

Total Market Size 42326 47332 52029 62566 68442 78610 89335

HISTORYThe Indian pharmaceutical industry is the world's third-largest by volume and is likely

to lead the manufacturing sector of India. India's bio-tech industry clocked a 17

percent growth with revenues of Rs.137 billion ($3 billion) in the 2009-10 financial

year over the previous fiscal. Bio-pharma was the biggest contributor generating 60

percent of the industry's growth at Rs.8,829 crore, followed by bio-services at

Rs.2,639 crore and bio-agri at Rs.1,936 crore. The first pharmaceutical company

are Bengal Chemicals and Pharmaceutical Works, which still exists today as one of

5 government-owned drug manufacturers, appeared in Calcutta in 1930. For the next

60 years, most of the drugs in India were imported by multinationals either in fully-

formulated or bulk form. The government started to encourage the growth of drug

manufacturing by Indian companies in the early 1960s, and with the Patents Act in

1970, enabled the industry to become what it is today. This patent act removed

composition patents from food and drugs, and though it kept process patents, these

were shortened to a period of five to seven years. The lack of patent protection made

the Indian market undesirable to the multinational companies that had dominated the

market, and while they streamed out, Indian companies started to take their places.

They carved a niche in both the Indian and world markets with their expertise in

reverse-engineering new processes for manufacturing drugs at low costs. Although

some of the larger companies have taken baby steps towards drug innovation, the

industry as a whole has been following this business model until the present.

THE DOMESTIC PHARMA INDUSTRY

The domestic Pharma Industry has recently achieved some historic milestones

through a leadership position and global presence as a world class cost effective

generic drugs' manufacturer of AIDS medicines. Many Indian companies are part of

an agreement where major AIDS drugs based on Lamivudine, Stavudine,

Zidovudine, Nevirapine will be supplied to Mozambique, Rwanda, South Africa and

Tanzania which have about 33% of all people living with AIDS in Africa. Yet another

US Scheme envisages sourcing Anti Retrovirals from some Indian companies whose

products are already US FDA approved. Many Indian companies maintain highest

standards in Purity, Stability and International Safety, Health and Environmental

(SHE) protection in production and supply of bulk drugs even to some innovator

companies. This speaks of the high quality standards maintained by a large number

of Indian Pharma companies as these bulk actives are used by the buyer companies

in manufacture of dosage forms which are again subjected to stringent assessment

by various regulatory authorities in the importing countries. More of Indian

companies are now seeking regulatory approvals in USA in specialized segments

like Anti-infectives, Cardiovasculars. Along with Brazil & PR China, India has carved

a niche for itself by being a top generic Pharma player.

Increasing number of Indian pharmaceutical companies have been getting

international regulatory approvals for their plants from agencies like USFDA (USA),

MHRA (UK), TGA (Australia), MCC (South Africa), Health Canada etc. India has the

largest number of USFDA - approved plants for generic manufacture. Considering

that the pharmaceutical industry involves sophisticated technology and stringent

"Good Manufacturing Practice (GMP) requirements, major share of Indian Pharma

exports going to highly developed western countries bears testimony to not only the

excellent quality of Indian pharmaceuticals but also its price competitiveness. More

than 50% share of exports is by way of dosage forms. Indian companies are now

seeking more Abbreviated New Drug Approvals (ANDAs) in USA in specialized

segments like anti-infective, cardio vascular and central nervous system groups.

EXPORTS

The Domestic pharma sector has been expanding and has is estimated at US$

11.72 billion (Rs 55454 crore) in 2008-09 from US$ 6.88 billion (Rs 32575 crore) in

2006-07. Indian exports are destined to various countries around the globe including

highly regulated markets of USA, Europe, Japan and Australia.

Export of domestic drugs and pharmaceuticals from 2006-07 to 2011- 12 are given in

table below:

Year Domestic Indian market(figure in Rs crore)

Growth Rate(%)

2006 - 07 32575 7.282007 - 08 34128 4.772008 - 09 39989 17.172009 – 10 45367 13.452010 – 11 50946 12.302011 – 12 55454 8.85

PHARMA EXPORT PROMOTION COUNCIL (Pharmexcil)

The Department had played a pivotal role in the formation of Pharmexcil consequent

to the recommendation from 9th Five Year Annual Plan Working Group Report on

Drugs and Pharmaceuticals. In the light of this, the Department constantly interacts

with Pharmexcil in their work areas. The role of Pharmexcil is for facilitation of

exports of Drugs, Pharmaceuticals, Biotechnology products, Herbal medicines and

Diagnostics, to name a few. It is authorized to issue Registration-cum-Membership

Certificate (RCMC) which is one of the requirements for the importers and exporters

of commodities. In addition to this, Pharmexcil is concerned with giving export thrust

to the various products through visits of delegations to various markets abroad,

organizing of seminars,workshops and exhibitions. As a major area of work,

Pharmexcil also holds Buyers/Sellers meets and compiles detailed data base on

pharma exports and problems in exporting pharma group products of

Pharmaceuticals.

KEY STRENGTHS OF PHARMA SECTOR

Low cost of innovation/Manufacturing/Capex costs/expenditure to run a cGMP

compliance facility.

Low cost scientific pool on shop floor leading to high quality documentation.

Proven track record in design of high tech manufacturing facilities.

Excellent regulatory compliance capabilities for operating these assets.

Recent success track record in circumventing API/formulation patents.

About 95% of the domestic requirement being met through domestic

production. 

India is regarded as a high-quality and skilled producer in the world.

It is not only an API and formulation manufacturing base, but also as an

emerging hub for: 

Contract research

Bio-technology

Clinical trials

Clinical data management.

The country has the distinction of providing quality healthcare at affordable

prices. 

Top 20 destinations of Indian Pharma products during 2008-09

S. No. Importing country 2008-09 (figure in Rs Crore)1 USA 7103.272 Russia 1519.203 Germany 1441.874 Austria 1417.155 UK 1233.096 South Africa 1126.757 Canada 1090.438 Brazil 1018.899 Nigeria 1001.7410 Ukraine 687.2211 Israel 686.2212 Netherlands 669.9813 Spain 620.0214 Turkey 614.2015 China 561.5316 Kenya 543.8617 Vietnam 536.6218 Belgium 520.9019 Italy 57.8520 Mexico 501.54

Research and Development

In no other Industry segment innovative R&D is as critical as in Pharma industry.

Here, the New Drug Discovery Research (NDDR) has to keep pace with the

emerging pattern of diseases as well as responses in managing existing diseases

where target organisms are becoming resistant to existing drugs. The NDDR is also

an expensive activity. It is encouraging to observe that at least 10 Indian companies

are into new drug discovery in the areas of infections, metabolic disorders like

diabetes, inflammation, respiratory, obesity & cancer. Most of these companies have

increased their R&D spending to over 5% of their respective sales turnovers. There

is notable success from some Indian companies in out licensing new molecules in

the asthma and diabetes segments to foreign companies. Introduction of Product

Patent for Pharmaceuticals is an important feature for Indian Pharma R&D scenario.

This has boosted the confidence of MNC Pharma companies in India where a

number of western Pharma companies have already R&D collaborations with Indian

Pharma companies in the field of NDDR. Some Indian companies have also got US-

FDA approvals for their new molecules as Innovative New Drugs (lND).

Western Pharma companies have recognized the attractiveness of India as a R&D

outsourcing destination due to low cost scientific manpower, excellent infrastructure,

top quality with capability to conduct modern research under GLP, GCP guidelines.

Many of them have set up independent R&D centres in India.

Clinical Trials to establish safety and efficacy of drugs constitute nearly 70% of R&D

costs. Considering the low cost of Research and Development in India, several MNC

Pharma companies as well as global Clinical Research Organizations are

increasingly making India a clinical research hub. In conclusion new drug discovery

in India has made a promising start wherein at least five to six potential candidates in

the areas of Malaria, Obesity, Cancer, Diabetes and Infections are likely to reach

Phase II clinical trials.

Contract Manufacturing

Many global pharmaceutical majors are looking to outsource manufacturing from

Indian companies, which enjoy much lower costs (both capital and recurring) than

their western counterparts. Many Indian companies have made their plants cGMP

compliant and India is also having the largest number of USFDA-approved plants

outside USA.

Indian companies are proving to be better at developing Active Pharmaceutical

Ingredients (APIs) than their competitors from target markets and that too with non-

infringing processes. Indian drugs are either entering in to strategic alliances with

large generic companies in the world of off-patent molecules or entering in to

contract manufacturing agreements with innovator companies for supplying complex

under-patent molecules.

Some of the companies like Dishman Pharma, Divis Labs and Matrix Labs have

been undertaking contract jobs for MNCs in the US and Europe. Even Shasun

Chemicals, Strides Arcolabs, Jubilant Organosys, Orchid Pharmaceuticals and many

other large Indian companies started undertaking contract manufacturing of APIs as

part of their additional revenue stream. Top MNCs like Pfizer, Merck, GSK, Sanofi

Aventis, Novartis, Teva etc. are largely depending on Indian companies for many of

their APIs and intermediates.

Major Pharmaceutical Public Sector Undertakings

Indian Drugs & Pharmaceuticals Limited (IDPL)

Hindustan Antibiotics Limited (HAL)

Bengal Chemicals & Pharmaceuticals Limited (BCPL)

Rajasthan Drugs and Pharmaceuticals Ltd. (RDPL)

Karnataka Antibiotics & Pharmaceuticals Ltd. (KAPL)

Major Pharmaceuticals Industries in India

Aurobindo Pharma Ltd

Aventis Pharma Ltd

Cadila Pharmaceuticals Ltd

Cipla Ltd

Dabur Pharma Ltd

Dey's Medical Stores Mfg. Ltd

Dr. Reddy's Laboratories Ltd

Elder Pharmaceuticals Ltd

Glenmark Pharmaceuticals Ltd

Glaxo SmithKline Pharmaceuticals Ltd

Lupin Ltd

Merck Ltd, India

Piramal Health Care 

Novartis India 

Pfizer Ltd

Ranbaxy Laboratories Ltd

Wockhardt Limited

Wyeth Laboratories Ltd

POLICY & BUDGET 2009-2010

The industry is undergoing consolidation due to recent legislation and policy

updates:

– Manufacturing units should adhere to good manufacturing practices (GMP)

outlined in Schedule M of the Drugs and Cosmetics Act.

– Manufacturing units are required to comply with the WHO and international

standards of production.

The National Pharmaceutical Pricing Authority (NPPA) is responsible for fixing and

controlling the prices of 74 bulk drugs and formulations under the Essential

Commodities Act.

Drug regulatory environment in India in transition

Existing drug regulatory system

India has a bifurcated drug regulatory system —regulatory functions are

divided between the Centre and state authorities.

Existing infrastructure at the Centre and in states is inadequate to perform the

assigned functions of drug administration with efficiency and speed, though

there is a renewed focus on the same.

Proposed new system

The Central Cabinet approved the formation of the Central Drug Authority

(CDA) in January 2007.

The proposed organisational structure of the CDA is to be analogous to the

USFDA.

It will be a strong, well-equipped, empowered, independent and professionally

managed body.

It is expected to facilitate up gradation of the national drugs regulator,

uniformity of licensing, and enforcement and improvement in drug regulations.

The efficiency and efficacy of drug administration is expected to be much

higher after this transition.

CDA – India’s new drug regulator

BUDGET MEASURES & POLICY CHANGES

Budget 2009–2010 reduced the customs duty from 10 per cent to 5 per cent

on imports of select life saving drugs and their bulk drugs for treating ailments

such as breast cancer, hepatitis, rheumatic arthritis, etc.

Customs duty has been reduced from 7.5 per cent to 5 per cent on two

specified life saving devices used in the treatment of heart conditions. These

devices are now fully exempt from excise duty and countervailing duty (CVD)

also.

The DCGI has made the registration of all clinical trials compulsory for trials

initiated after June 15, 2009. Earlier, the registration of clinical trials by various

institutions and companies was voluntary.

The DCGI has withdrawn the powers given to state-level regulators to issue

Certificate of Pharmaceutical Product (CoPP).

The DCGI has discontinued issuance of the WHO-GMP certificate for both

pharmaceutical products and plant audits.

CHANGING TRENDS

FOCUS OF INDIAN COMPANIES SHIFTING FROM US

KEY PLAYERS

Leading players by annual sales

KEY OPPORTUNITIES Indian drug discovery and development outsourcing market is projected to

grow at a rate of 50 per cent to reach US$ 900 million in 2009.

Bio informatics companies that offer research-enabling software technologies

are also emerging as a

valuable segment.

CLINICAL RESEARCH – Leveraging India’s advantage

The clinical trials market in India is currently sized at approximately

US$ 250 million to US$ 275 million and is expected to grow at a robust

CAGR of 30 per cent over the next few years, at almost double the

global average.

CONTRACT MANUFACTURING (CM)

The Indian pharmaceutical manufacturing outsourcing market is valued

at US$ 1.1 billion and the segment is growing at thrice the global

market rate.

India‘s share of the outsourcing market is estimated to increase from

2.8 per cent in 2007 to 5.5 per cent in 2010.

APIs /intermediate outsourcing is more prevalent in India than

formulation outsourcing; around 64 per cent of total outsourcing is in

the area of APIs/intermediates.

The market is estimated to increase to US$ 1 billion by 2010.

By 2010, the demand for contract manufacturing of formulations is

likely to be around US$ 210 million to US$ 300 million. APIs and

intermediate demand is likely to be in the range of US$ 600 million to

US$ 700 million by 2010.

RURAL MARKET OPPORTUNITIES

65 per cent of the population resides in rural areas with limited or absolutely

no access to medicines and other healthcare facilities.

With a growth rate of 39 per cent in 2006, the rural market has outstripped the

growth in the urban region across most of the therapeutic categories in both

value and volume terms.

General physician-driven segments such as anti-infectives, analgesics, etc.,

have registered high growth compared to specialist-driven segments such as

CNS.

Non-communicable diseases such as cancer, blindness, mental illness,

hypertension, diabetes, HIV/AIDS, accidents and injuries are also on the rise.

COMPANY PROFILE

Founder : Dr. Desh Bandhu Gupta

Registered office : Santacruz (East), Mumbai.

Date of commencement : 1968

BOARD OF DIRECTORS

1. Dr. Desh Bandhu Gupta (Chairman)

2. Dr. Kamal K Sharma (Managing Director)

3. Mrs. M.D Gupta (Executive Director)

4. Mr. Nilesh Gupta (Executive Director)

5. Mr D.K Contractor

6. Mr. Marc Desaedeleer

7. Ms. Vinita Gupta

8. Dr. K.U Mada

9. Mr. Sunil Nair

10.Mr. R.A Shah

LOGO OF LUPIN LIMITED

HISTORY & MILESTONES

Year Milestones2009 Lupin acquired majority stake in Multicare Pharmaceuticals Philippines Inc.2008 Lupin expanded its product basket in Japan-Kyowa and received ten

products approval from Ministry of Health & Labour Welfare, Japan.Lupin acquired Hormosan Pharma GmbH, a Generic Company in Germany.Lupin acquired stake in Generic Health Pty Ltd., in Australia.Lupin acquired Pharma Dynamics in South Africa.

2007 Lupin acquired Vadodara based Rubamin Laboratories Ltd (rechristened to Novodigm Ltd).Lupin acquired Kyowa Pharmaceutical Industry Company Limited, a leading Generic Company in Japan.Commercial production was started at the New finished dosage facility at Jammu.Lupin received “Best new manufacturer of the year” award from Amerisource Bergen.

2006 A new facility was set up at Jammu.Maiden Bonus share were issued in the ratio of 1:1.Maiden issue of Foreign Currency Convertible Bonds (FCCB) aggregating US $100 mn, which are listed on Singapore Stock Exchange.

2005 Maiden Employees Stock Option Plan was implemented.US FDA and MHRA (UK) approvals were received for Goa.New Lovastatin plant at Tarapur was approved by the US FDA.

2004 WHO approval was received for State of the art formulation Plants at Goa and Aurangabad.

2003 Lupin had successfully implemented SAP ERP across the Company to unify all business functions and processes.Introduced collaborative messaging and workflow solution on the intranet.Oral Cefaclor injectible Plant at Mandideep was approved by US FDA.Lupin Pharmaceuticals Inc. USA, was formed for trading, marketing and developmental activities in the US.

2002 Exports to the Advanced Markets crossed Rs.1000 mn.Rising trend of exports as a % of total revenue – up 33% year-over-year.Patent filings crossed 100.Five ANDAs were filed.New Anti-TB facility was commissioned at Aurangabad.Rablet was rated by ORG-Marg as the second best launch of FY 2002-03.

2001 Lupin became the only Asian Pharmaceutical company to receive US FDA approvals for its sterile cephalosporin facility.A state of the art US FDA approvable oral cephalosporin bulk active plant was commissioned.State of the art R&D Centre at Pune was commissioned.Lupin commenced supply of Cephalosporin bulk actives to its alliance partners in the US.Lupin Laboratories Ltd was amalgamated with Lupin Chemicals Ltd, whose

name was changed to Lupin Limited.2000 The Cefotaxime facility was approved by the US FDA.

The Company’s restructuring operations yielded encouraging results.Work commenced on the R&D Centre at Pune.

1999 Lupin’s injectable cephalosporin bulk active plant at Mandideep was approved by UK MCA.

1997 Lupin’s injectable Cephalosporins dosages plant at Mandideep obtained UK MCA approval.Lupin’s formulations facility at Aurangabad was upgraded.Three plants of Lupin, manufacturing Cefaclor at Mandideep, 7 ACCA at Ankleshwar and Rifampicin at Tarapur, got US FDA approvals.ICMA Technology award was given for injectable Cephalosporins.

1996 Government of India conferred the ‘Best Exporter’ Award on Lupin.Company received the ICMA Technology award for injectable Cephalosporins.

1992 Fermentation Plant of Lupin Chemicals Ltd was established at Tarapur, Maharashtra.Sterile Plant for injectable Cephalosporins (bulk) was commissioned at Mandideep.Lupin Laboratories Ltd and Lupin Chemicals Ltd raised money through IPOs in 1993-94.Won FICCI’s award for contribution towards rural development.

1991 Injectable cephalosporin (bulk and dosages) production was initiated at Mandideep.Lupin won the ICMA technology award for successfully manufacturing Vitamin B6.

1989 Joint venture in Thailand – Lupin Chemicals (Thailand) Ltd was established.Two Plants Ankleshwar and Mandideep received US FDA approvals for maintaining stringent quality standards.

1988 The Lupin Human Welfare and Research Foundation (LHWRF) was founded by Dr Desh Bandhu Gupta to provide an alternative, sustainable and replicable model of rural development.

1987 Cephalexin Plant at Mandideep and 7 ADCA plant at Ankleshwar went on stream.

1981 Ethambutol production was started1980 Lupin commissioned a formulations plant and an R&D center at

Aurangabad.1972 Lupin Laboratories Pvt Ltd was incorporated.1968 Lupin commenced business.

CORPORATE OVERVIEW

Headquartered in Mumbai, India, Lupin Limited today is an innovation led

transnational pharmaceutical company producing a wide range of quality, affordable

generic and branded formulations and APIs for the developed and developing

markets of the world. Dr. Desh Bandhu Gupta’s vision and dream to fight life

threatening infectious diseases and manufacture drugs of highest national priority led

to the formation of Lupin in the year 1968. His Vision, his inimitable commitment and

verve have steered Lupin to achieving the distinction of becoming one of the fastest

growing Generic players globally.

Lupin first gained recognition when it became one of the world’s largest

manufacturers of Tuberculosis drugs. Over the years, the Company has moved up

the value chain and has not only mastered the business of intermediates and APIs,

but has also leveraged its strengths to build a formidable formulations business

globally.

The year 2008-09 was yet another year with impressive growth of 32% in revenue

and 50% (excluding IP income) in profits. Over the last 5 years, the Company has

recorded a CAGR of 31% and 53% in sales and net profits respectively.

The Company today has significant market share in key markets in the

Cardiovascular (prils and statins), Diabetology, Asthma, Pediatrics, CNS, GI, Anti-

Infectives and NSAIDs therapy segments, not to mention global leadership positions

in the Anti-TB and Cephalosporins segments. The Company’s R&D endeavours

have resulted in significant progress in its NCE program. The Company’s foray into

Advanced Drug Delivery Systems has resulted in the development of platform

technologies that are being used to develop value-added generic pharmaceuticals.

Our Drugs and products reach over 70 countries in the world. Today, Lupin has the

unique distinction of being the fastest growing top 10 Generics players in the two

largest pharmaceutical markets of the world – The U.S (ranked 9th by prescriptions

& growing at 92 %) and Japan (ranked 7th and growing at 23%). The company is

also the fastest growing, top 5 pharmaceutical players in India (ORG IMS - March

2009) and the fastest growing Generic player in South Africa (ranked 6 th and growing

at over 30 % annually - IMS March 2009).Lupin’s world class manufacturing facilities,

spread across India and Japan, have played a critical role in enabling the Company

realize its global aspirations. Benchmarked to International standards, these facilities

are approved by international regulatory agencies like US FDA, UK MHRA, Japan’s

MHLW, TGA Australia, WHO, and MCC South Africa.

VISION

MISSION

Lupin Pharmaceuticals, Inc. is committed to bringing innovative products for the

healthcare professional to improve the health and well being of individuals by

capitalizing on the strength :

Scientific expertise to develop new and improved products and product line extensions;

Manufacturing technology, expertise and infrastructure;

Financial resources.

VALUES

Objectives

To develop proper social, cultural, scientific and spiritual attitudes

amidst the rural community.

To instil in villagers, especially women, children, youth and older

people an urge, and keenness to work for their own development.

To develop an attitude towards living a healthy life and taking

concrete steps in that direction.

Economic

To help create more job opportunities particularly for unemployed

youth and women.

To strengthen primary occupations like agriculture and animal

husbandry through higher output and value addition.

To strengthen secondary occupations such as cottage industry,

handicrafts and service sector through quality enhancement and

wider market acceptability.

Infrastructure

To create basic infrastructure facilities for the community such as;

Provision for drinking water

Building internal roads

Basic Sanitation

Formal Education

Community centres

Electrification

Training cum production centres etc.

QUALITY POLICY

The Company shall establish and maintain high standards of

quality for its products manufactured at various sites, including

those at contract manufacturing sites, meeting cGMP and cGLP

norms.

Products shall be manufactured and marketed meeting all quality

parameters related to identity, purity, safety and efficacy through

well-defined quality assurance and validated systems.

The Company shall comply with current national and international

regulations as applicable and continuously strive for achieving

stringent global standards.

Major thrust shall be given on quality up gradation and product

integrity on continuous basis to achieve higher level of customer

satisfaction.

Continuous training shall be given to the employees in the

organization to enhance their skills in performing their assigned

tasks.

FINANCIAL POSITION OF LUPIN LIMITED

2009-10 revenues of Rs.48708 million, growing at 25% & Net Profit at Rs.

6816 million, growing at 36%.

US Formulation revenues contribute over 50%

– No. 1 Position in 8 products out of 22 products marketed .

– Amongst Top 3 market share in most of other products.

– One of the fastest growing generic players in the US by

prescriptions and the 5th largest in terms of total prescription base.

Growth in the Indian Domestic Market at 25%

Wide Business Portfolio encompassing

– Intermediates

– Drug Substances (API’s)

– Drug Products (Finished Dosages)

– Novel Drug Delivery Systems

– Drug Discovery

– Biotech

– Over 10,250 employees worldwide.

Amongst the Top 5 pharmaceutical companies in India.

Strong R&D and Manufacturing capabilities.

Global leaders in Cephalosporin, Anti-TB Products, Prils and

Statins.

Listed in all major Indian stock exchanges.

LUPIN BUSINESS

Export business increasing over the last 5 years. From 51% IN FY

05 to 65% in CY.

Value adding Formulations. From 45% in FY 05 to 82% in CY.

TURNOVER

APIs and Intermediates Global Position

• Amongst leading global supplier of intermediates and APIs

• Manufacturing facilities are built to global scale and standards

• Competitive advantage built through cost, quality, compliance

and reliability of supply.

ORGANOGRAM OF LUPIN LIMITED, JAMMU

LUPIN JAMMU MANUFACTURING

• Lupin Jammu is a world class facility, manufacturing following

formulations:

o Tablets

o Capsules

o Dry Powder Inhalers

o Metered Dose Inhalers

o Dry Syrup

INTRODUCTION TO THE TOPIC

Training Programs for the Pharma Industry

Pharmaceutical Industry is one of the fast-growing industries with a turnover of approx Rupees Thirty thousand crores considering both ethical & institutional sales.

It is also one of the most competitive fields with the players constantly under pressure to

Develop newer products, and Market them successfully in shortest time possible.

On the other hand, it is plagued by a very high attrition rate with the Companies having to invest a lot in recruiting & training of employees. The problem is further compounded by the relative lack of facilities in the formal educational system to impart training to the potential employees in the areas such as Clinical Research and Pharmaceutical Salesmanship.

Salesmanship in Pharma Industry – generating the revenue

The Marketing & Sales function in Pharma Industry is different from that in consumer goods or industrial products segment. The emphasis is on ‘personal selling’ as other methods like advertising, publicity and sales promotion activities have a relatively limited role to play.

There are various reasons for this, such as:

Drugs & Cosmetics Act prohibits advertising of pharmaceutical products in mass media,

Customer base (Medical practitioners, stockists & retailers) is relatively small but spread over a large geographical area,

Complex nature of products requires optimum customer fit for products,

Past experience of communicating with customers through courier agencies delivering samples and literature has neither been successful nor cost-effective, and

Competitors’ activities almost always involve salespersons.

Personal selling, although expensive, is often indispensable due to increasing business competition and increasing sophistication of both customers as well as products in the Pharma industry.

In a highly competitive market, such as pharmaceutical industry, where many companies offer identical or similar (‘me-too’) products, it is often the person behind the product who makes the difference!

Top

Planning the training program

The most effective learning takes place when the new salesperson:

Perceives a need to learn a particular skill, or perceives some form of personal reward for doing so

Can practice and apply the new knowledge in a setting similar to the actual sales environment

Can receive supervision, support, and reinforcement from someone respected for having sufficient expertise in that skill to assist in the learning process

Attitudes and Behaviour of Traditional Students versus Learners

Students in a regular college set-up display the following traits:

Study to pass exams Passively accept and memorize ideas from others

Complete assignments to fulfill teacher’s diktats or syllabi requirements

See course as means to getting a degree

Goal: Good grades

On the other hand, learners in a training program organized by a professional Company:

Internalize concepts to be successful Are aware of their roles

Use assignments to practice and improve skills

See course as opportunity to enhance success

Goal: mastering Knowledge & Skills to succeed in the chosen field

Assignments

Internet marketing advertising

Successful Entrepreneurs

Internet advertising agency

It is essential to remember that the training program is not a theoretical classroom activity but has ‘applied’ importance both for the trainees as well as the Company. The knowledge and skills imparted in the training program must translate into profitable sales turnover for the Company and as a result the salesperson should be able to rise higher in his / her career.

Why train Salespersons in Pharma Industry?

Some of the key reasons to impart training to new salespersons getting inducted in the Company include-

Decreased turnover of people Increase in sales revenue

Enhanced long –term favorable and personal relationships with customers

Decreased costs

Better Morale

Improved time and territory efficiency

Obtain feedback from salespeople

Training programs should include the best possible techniques for imparting knowledge, skills, and correct attitudes to salespeople.

The most important aspects to be considered here are –

• MotivationThe program should stimulate the trainees to perform to their best ability and achieve personal and organizational goals.

• Purpose Both the trainer and the trainee must know the purpose of the training program

• Reinforcement People learn best when they are positively and quickly reinforced

• Participation Get the group involved in the learning activities and make it a two-way process.

• Practice Difficult and new routines become easier with practice.

• Organizing for learning By organizing the learning process into a logical sequence, each successive learning experience can be built on preceding experiences.

The new recruit then should be able to integrate those experiences into a meaningful pattern of knowledge, skills and attitudes to perform in the field and generate sales revenue.

Top

Developing the Content of a training program

A well-planned training program should provide the following content for learning

• Product knowledge– The salesperson should become familiar with the features of Company products– He/she should be able to explain the product benefits to the customers– The salesperson should have a complete knowledge of competitor products

• Company knowledge– What does the company do?– What is the company’s organization structure?– Who is responsible for what?– What are the company’s procedures?– What does the company stand for?

• Market knowledge– What are the general business conditions?– Who are the competitors and how do they operate?– Who are the customers and what are their needs?– What is the customer’s buying process?

• Selling activities– Gather relevant information about Prospect– Approach the prospect– Develop a sales presentation– Anticipate and answer objections– Close the sale– Maintain continuing good relations

• Non-selling activities– Customer service- “those activities that enhance or facilitate the sale and use of one’s product and service”– Stocking shelves, planning promotions, processing orders, delivering, handling complaints– Generating sales inquiries – Paperwork, including periodic reports

Top

Who trains and where?

The training activity in a Pharma Company has undergone tremendous change over the last couple of decades. Traditionally, the training was the responsibility of in-house experts and typically this approach included the following -

The training was often centralized at the HQ Sales specialists prepared the materials and conducted the classroom training as

well as on-the-job training

However, this has its own disadvantages

Often the staff experts lack experience in realistic field-selling situations May cost small firms too much money

Outside Specialists

Nowadays, there is a growing trend of out-sourcing the training activity to outside experts who often have greater experience and expertise in the area. Outside consultants may be entirely responsible for the training programs or brought to conduct specific sessions.

Usually, these experts tailor their training inputs to match the specific needs of the Company or the industry.

However, an outside specialist may be unfamiliar with a company’s sales and marketing situation.

Many companies place new sales personnel into the field after only a brief orientation. In this case the salesperson is expected to struggle and learn for himself.

Benefits of this approach include -

Only those who stay with the company will undergo the more expensive training program at a later date

The salesperson will have a better understanding and frame of reference for the material taught in the training sessions

However, waiting to train a salesperson has disadvantages like putting the relationship with customers at risk and adversely affecting the sales revenue.

Due to these risks, most companies provide enough initial training or orientation so that a salesperson can function at some minimum level in the field. Advance training is then added at a later time.

OBJECTIVES OF THE STUDY

The present study on “A Study training & development program in Pharmaceutical Sector ” was undertaken with the

following objectives:

• To find whether the existing training program in the organization exactly measures

the employee’s performance.

• To find whether the feedback from the appraisal system assists in the employee’s

training and development.

• To determine the gaps in the existing system.

• To determine what type of appraisal did the employee’s really looking for.

• To find if there is any opportunities provided for the employees to improve their

performance.

SCOPE OF THE STUDY

The scope of the project is fully dependent upon the objectives of the project.

• This study can be helpful to the company for conducting any further research.

• The study is also helpful in finding out the respondent’s opinion towards certain

attributes.

• It is also helpful in finding out the reach and effectiveness of the performance

appraisal system.

• This study also serves as a base for understanding the perception about the

employees regarding their performance appraisal.

• With the results of the study the company can improve their standards of their

appraisal system.

LIMITATIONS OF THE STUDY

• Time and resource were the major constraints during the execution of the project.

Therefore only a limited number of employees were included in the project.

• Some of the respondents were too busy with tier work and not even ready to spare

time to fill up the questionnaire.

• There were many respondents who hesitated to answer the questionnaire.

• The human behaviour is dynamic and hence the results may not hold good for a

long time.

• The results of the survey are totally dependent on the accuracy and authenticity of

the information provided by the respondents.

METHODOLOGY

INTRODUCTION

Research is a scientific and systematic search for pertinent information on a specific

topic. Research is an art of scientific investigation. According to Clifford Woody,

“Research comprises defining and redefining problems, formulating hypothesis or

suggested solutions, collecting, organizing and evaluating data, making deductions

and reaching conclusions and at last carefully testing the conclusions to determine

whether they fit the formulating hypothesis”.

RESEARCH DESIGN

Research design aids the researcher in the allocation of limited resources by posing

crucial choices in methodology.

Research design is the plan and structure of investigation so conceived as to obtain

answers to research questions. The plan is the over all scheme or program of the

research. It includes an outline of what the investigator will do from writing

hypothesis and their operational implications to the final analysis of data.

DESCRIPTIVE RESEARCH DESIGN

The design for this study is descriptive research design. This design was chosen as

it describes accurately the characteristics of a particular system as well as the views

held by individuals about the system. The views and opinions of employees about

the system help to study the suitability of the system as well as the constraints that

might restrict its effectiveness.

SAMPLING TECHNIQUES

The sampling technique adopted for the purpose of the study is convenience

sampling. As the name implies a convenience sample means selecting particular

units of the universe to constitute a sample.

SAMPLE SIZE

The sample size of the study is 50. This sample is considered as representative.

DATA COLLECTION

PRIMARY SOURCE:

The primary source of data is through Questionnaire.

SECONDARY SOURCE:

The secondary source of information is based on the various details retrieved from

Journals, Websites and Magazines.

The data for this study has been collected through primary sources. Primary data for

this study was collected with the help of Questionnaires.

TOOLS OF THE STUDY

Tool used for data collection:

The tool used for collecting the data is through the questionnaire.

The main reason for selecting the questionnaire method for the study is:

· Respondents have adequate time to give well thought out answers.

· The time of the study was also a limiting factor.

· Five pointer scales were used through the Questionnaire.

Statistical tools used

Statistical tools like Tabulation, Graphic Representations and percentage analysis

are used in the compilation and computation of data.

ANALYSIS & INTERPRETATION

ANALYSIS OF THE DATA

TABLE 1

Showing Sex of the respondents

GenderNo. of Respondents Percentage

MALE 40 80FEMALE 10 20

Inference From the above table it is inferred that out of 50 respondents 80% of

them are males and 20% of the respondents are females.

TABLE 2

Showing age group of the respondents

Age group No. of Respondent Percentage19-23 9 18

24-28 20 4029-34 18 3634-38 1 2Above 38 2 4 Total 50 100

Inference The above table shows that 40% of the employees are between the age

group 24-28, 36% of the respondents fall under the age group of 29-34, 18% of the

respondents are 19-23 and only 2% fall under 34-38 and 4% are above 38.

TABLE 3

Showing frequency of conflicts after appraisal

Frequency of conflictsNo. of respondents Percentage

Frequently 2 4Often 15 30

Sometimes 23 46Never 10 20 50 100

Inference The above table shows that 46% of the respondents feel that conflicts

arise sometimes after the appraisal is made, 30% feel that often conflicts arise, 20%

feel there are no conflicts ever and only 4% feel that there are frequent conflicts after

the appraisal.

TABLE 4

Showing the preference of the appraisal

Preference of appraisal No. of respondent PercentageColleagues 14 28Subordinates 7 14Superiors 10 20All the above 19 38

50 100

Inference The above table shows that 38% of the respondents prefer appraisal to be

done by all the above, 28% prefer colleagues appraisal, 20% prefer superior

appraisal and only 14% prefer appraisal to be done by subordinates.

TABLE 5

Showing the basis of the performance appraisal

Basis of appraisal No. of respondent PercentageQuality 3 6Target 8 16Both 39 78 50 100

Inference The above table shows that 78% of the respondents prefer quality and

targets both as the basis of performance appraisal, 16% prefer targets as the basis

and only 6% prefer only quality as the basis for performance appraisal.

TABLE 6

Showing the frequency of the appraisal system

Frequency of appraisalNo. of respondents Percentage

Monthly 8 16Half Yearly 26 52Annual 16 32 50 100

Inference The above table shows that 52% of the respondents prefer half yearly

appraisal, 32% of the respondents prefer annual appraisal and only 16% prefer

monthly appraisal.

FINDINGS

80% of the respondents were male.

Majority of the respondents (40%) are between the age of 24-28 and the low

level (2%) was between the age of 34-38.

38% of the respondents prefer supervisors, colleagues and subordinates for

their appraisal and the low level 14% prefer subordinates for their appraisal.

78% of the respondents prefer both the quality and target for their basis of

performance appraisal and low level 6% prefer quality for their basis of

performance appraisal.

52% of the respondents prefer the frequency of appraisal as half yearly and

the low level 16% prefer monthly.

86% of the respondents prefer that performance appraisal should be based

on all (personality traits, behaviour and results) and the low level 6% prefer

behavior traits.

83% of the respondents feel that the performance appraisal changes their

attitude or behavior.

56% of the respondents are agree with discussion at the time of appraisal and

the low level 2% were disagree.

66% of the respondents are agree with feedback given at the time of appraisal

and the low level 2% were strongly disagree.

48% of the respondents are agree with evaluation of the strength and

weaknesses at the time of appraisal and the low level 2% were strongly

disagree.

48% of the respondents are agree with identification of skill gaps and the low

level 2% were strongly disagree with this.

58% of the respondents agree on effective training after appraisal review and

the low level 4% were strongly disagree.

60% of the respondents are agree with the development of the individuals and

the low level 2% were disagree.

54% of the respondents are agree with the promotional aspects through

appraisal and the low level 6% were disagree.

SUGGESTIONS

Suggestions by employees

Job rotation should be there.

Training should be provided for the allocated jobs and to enhance the

performance.

Half yearly review of the targets should be done to find out the gaps in skills.

360˚ appraisal system should be adopted.

Training on SAP should be given properly.

Transparency in the appraisal system should be maintained and feed back

given by the employees should be paid due attention and convincing replies

should be given when required.

Market correction should be considered while appraisal system.

Suggestions by the researcher

The company should conduct effective training after the performance

appraisal for their employees to improve their performance

The appraiser should keep on contact with the employees and motivate them

for their growth and also to achieve the organizational goals.

Once an employee is evaluated, he/she has to be informed about their

strength and weaknesses. An employee should aware of the above, he/she

will improve their strengths and weaknesses and also it helps to increase the

productivity of the organisation.

QUESTIONNAIRE

1. Are there any job targets established before the performance appraisal?Frequently……… Often……… Sometimes……… Never……….

2. Does there any conflicts arise after the performance appraisal is made? Frequently……… Often……… Sometimes……… Never……….

3. Whose appraisal do you prefer?a) Colleagues b) Subordinates c) Superiors d) All the above

4. Performance appraisal should be made on youra) Quality b)Target c) Both

5. The frequency of the appraisal should bea) Monthly b) Half Yearly c) Annual

6. Appraiser appraises your performance based ona) Personality traits b) Behavior c) Results d) All the above

7. In your view, performance appraisal should be based on which of the followinga) Personality traits b) Behavior c Results d) All the above

8. Does the performance appraisal review change your attitude/behavior?a) Yes b No

9. Do you have any ideas to recommend for your development.a) Yes b) No

If yes, please specify…………………………………………………………………………..

DEMOGRAPHICS

Gender: a) Male b) Female

Age Group: a) 19-23 b) 24-28 c) 29-34 d) 34-38 e) Above 38

Designation:

BIBLIOGRAPHY

1. www.ibef.org

2. www.in.kpmg.com

3. www.lupinworld.com

4. Lupin manual on performance management system

5. www. wikipedia .org

CERTIFICATE

The project report titled “A Study training & development program in Pharmaceutical Sector" Prepared by Pooja Gupta, under the guidance and supervision of Mr. Gourav Jain (Lecturer OF M.B.A. Deptt., I.M.E. COLLEGE SAGAR) for the partial fulfillment of the degree of Master of Business Administration is satisfactory in respect of :-

Signature of H.O.D. : -------------------------

Signature of Supervisor : ------------------------

Signature of Examiner : -------------------------

DECLARATION BY CANDIDATE

I declare that the project report on “A Study

training & development program in

Pharmaceutical Sector " is my own work,

conduct under the supervision of Mr. Gourav Jain

(Lecturer OF M.B.A. Deptt., I.M.E.

COLLEGE SAGAR) Affiliated to Dr. Hari Singh

Gour University, Sagar .To the best of my

knowledge the report does not contain any work

which has been submitted for the award of any

degree, anywhere.

Signature of the Candidate

Pooja Gupta

M.B.A. 4th SEM..

ACKNOWLEDGEMENTS

I wish to express my deep sense of gratitude to all those who

generously helped in successful completion of this research work by

sharing their valuable time and knowledge. A great deal of motivation,

direction and hard work was require to complete the report, but the

precious guidance provided by my teachers made this job enjoyable and

a nice learning experience.

It is my proud privilege to express my deep sense regards to the

Dr. Pramesh Gautam (H.O.D. of mBA Deptt., SVNIT College, Sagar)

affiliated Dr. Hari Singh Gour Vishwavidhyalaya, Sagar for giving me

opportunity to prepare a project report on the “A Study training & development program in Pharmaceutical Sector " which I have done. I express

my deep sense of gratitude to Mr. Gourav Jain (Lecturer OF M.B.A. Deptt., I.M.E. COLLEGE SAGAR) for his constant encouragement, guidance and his valuable suggestion to

under take this study.

I am also grateful to my faculty members, customers, friends and

family members for their outstanding support and guidance.

Pooja Gupta

M. B. A. 4th sem.

PREFACE

The project report has an objective to get the MBA student familiar

with real life business situation and gives an opportunity to the student of

understand the theoretical concepts of marketing and finance in practical

way.

In today’s world “Consumer is the King” consumer test and

preference go alone way in the actual sales of the product. Every research

work has to deal with various people in concern organization and each of

them have their own opinion and thinking about various topics.

The main aim of the survey report was to determine “A Study training & development program in Pharmaceutical Sector " . I tried my best to express the

report through satisfactional representation, graphs, pie diagrams etc. and

it helped me to enhance my knowledge I am extremely happy to place

before our esteemed teachers.