Introduction
From a small PCD pharma company to a large national pharmaceutical corporation, a diverse range of companies distribute pharma products across India. Distribution in the pharmaceutical world is a vital segment. It connects the manufacturers to retailers, clinics, hospitals, and eventually to patients. Pharma distributors play a significant role in this chain. Pharmaceutical companies create vast production of medicines, but selling them is tricky. That’s why they use distribution channels to help get these medicines to the right places smartly and efficiently. They ensure that the patients have access to the medicines they need at the right time.
If you are into the PCD pharma franchise business or are planning to start a Pharma Franchise company in Gujarat, you must have an insider perspective on the vital role of distribution in the pharma supply chain.
Difference between Wholesalers and Distributors in the Pharma Sector
The pharma distribution network in India consists of a range of players that supply pharma products from manufacturing companies to end consumers. The two major types of distributors are pharma distributors and wholesalers. Both these roles may seem similar but they are different.
Distributors supply medicines directly to hospitals, clinics, and chemists. Whereas, wholesalers operate on a larger scale, where they buy in bulk from pharma manufacturers and sell it to retailers. Many pharma franchise companies compared to traditional distribution models have adopted the option of PCD models. These companies cater to a dedicated region on a monopoly basis. Franchise companies advertise and distribute pharma products in their designated areas. They offer extensive coverage and profits without spending much on overheads and infrastructure. They play a vital role for companies in remote locations. They help drug companies to increase their presence across the complex medical distribution market in India.
Categories of distributors and wholesalers in the Pharma Sector/PCD Pharma Franchise
Distributors and wholesalers play vital roles in ensuring a seamless supply chain in the pharma sector. They are the crucial links between pharma manufacturing companies, retailers, and end consumers. Continue reading further to understand – the different types of distributors and wholesalers in this sector.
Types of distributors
Single Party Distributor
- Single-party distributors are mostly pharmaceutical distributors and promoters.
- It is a simplified distribution model.
- Buy pharma products and medicines directly from the manufacturer.
- Depending on their marketing strategy, they sell it directly to the clients.
- This streamlined approach helps maintain a direct and efficient supply chain.
- These Single-party distributors work on a small scale.
- Their target area for the promotion and distribution of their products is generally a small region.
- Often their sale quantum is comparatively less, but the profit margins are very high.
- If a pharmaceutical company is targeting a particular region then single-party distributors are the best option.
Multiple Party Distributors
- Unlike single-party distributors, who work for only one pharmaceutical company, multiple-party distributors work with many pharma manufacturing companies.
- As the name suggests, they sell or distribute pharma products to multiple channels.
- Store and supply an extensive product range to a set of clients in their designated region.
- Distribute the pharma stock to small wholesalers, brokers, PCD pharma franchises, agents, hospitals, and retailers.
- Have a vast and diverse inventory and handle logistics for higher volumes.
- Are also responsible for promotion and marketing.
- Many have their own distribution vehicles, storage facilities, and sales teams to efficiently cover their dedicated market.
- Operate on a defined territory with fixed margins, and companies and manufacturers gain from large-scale sales but with low-profit margins.
Types of Wholesalers
Producer Wholesaler
Producer wholesalers work exclusively with pharma companies to promote their products. They have their setup in renowned markets to display the pharma products of each company. The aim is to advertise and create awareness about the latest products among retailers, doctors, stockists, and other partners. Rather than generating high-volume sales, their focus is on marketing. They help the manufacturers build their brands and create demand for their new products. Their on-the-ground presence and tailored efforts assist companies in expanding their regional reach.
Merchant Wholesaler
Merchant wholesalers buy medicines in bulk quantities from different pharma companies. They store these products in their warehouse and resell them in small quantities to several retailers, regional wholesalers, clinics, hospitals, chemists, and more. They are independent distributors with a diverse distribution network. They generate profits by filling supply gaps for a range of medicines across different regions.
Agents and Brokers
Agents and Brokers in the pharma sectors work as middlemen to help the manufacturing companies sell their products. They use their knowledge and industry network to generate sales between pharma companies and end consumers like hospitals, stockists, retailers, etc. Agents and Brokers charge commissions to sell products that are not in demand. Having dedicated brokers and agents helps large pharmaceutical companies to reach more customers spread across fragmented markets without increasing their sales team.
Distribution Channels in the Pharma Industry
Exclusive Distribution
With this channel, pharma manufacturers appoint a single distributor to promote and sell their products in a specific market or region. Exclusive distribution channels have full rights and access to the entire product range and branding assets. They are the sole channel of a pharma company in the designated region.
Intensive Distribution
With intensive distribution channels, pharma companies aim to reach all suitable and available outlets. Through this channel, they aim to maximize their market coverage. They strive to offer OTC pharma products and essential medicines to all outlets. The focus here is on the ready availability of products based on market demand.
Selective Distribution
Selective distribution involves supplying pharma products via a selective range of retail channels in a specific market. It depends on the product demand in a particular region. It aims to partner with outlets with trained pharmacists, adequate pharma set-up, and ethical marketing techniques.
Conclusion
A crucial aspect of healthcare in India is ensuring that medicines reach people in every part of the country. Pharma distribution uses a range of channels. Companies select these channels based on the needs of their products. If you are planning to set up your PCD pharma in Ahmedabad, get in touch with us. We are a renowned Gujarat based pharma franchise company offering high-quality products and excellent support. To start your business, assess factors like products, market demand, location, investment, manpower, etc. Above all, choosing the right partner is the beginning of your thriving pharma business.