INTERNATIONAL MARKETING

PROJECT
COMPANY: PIRAMAL HEALTH
CARE

PRODUCT CATEGORY: INHALATION

ANESTHESIA
PRODUCT: HALOTHANE
SKU: 250ml

PROJECT BY GROUP A10

KARAN CHAWLA (10)
ANUBHUTI JAIN (30)
RASHMEET KOHLI (36)
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HORMUZ RAGINA (56)

KIRTHI S RAI (57)
SHRUTI THAKKER (67)
ACKNOWLEDGEMENT
We would like to take this opportunity to thank Dr.Venkatesh
Kshirsagar, Manager- International business Global Critical Care,
Piramal Health Care Limited who helped us with our project. We
would also like to mention Ms. Sanchali Gupta and Gayatri
Deshpande, the Country Managers of Iran and Indonesia
respectively for being patient with our questions and giving time
to make us understand the markets.
We would also want to acknowledge our Prof. R.Venkatesh for
giving us the opportunity to understand the International Market
better through this project.

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CONTENT
I. Pharmaceutical
Industry
.05
A. Key elements of the sector.

05
B. Description of the product category and
product.05
II. Business history: Piramal Health Care
Limited.08
III. Market
Research
..10
A. Target
countries
10
1. Primary:
IRAN
..10
2. Secondary:
INDONESIA.
...18
B. Description of
IRAN
10
C. Market conditions in
IRAN
11

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1. Existing
demand
....11
2. Competition
.....12
3. Strengths and weaknesses of the economy-barriers to entry,
etc.12
IV. Marketing
decisions
..13
A. Distribution
strategies
.13
1. Direct
exporting
13
2. Documentation
.15
3. Direct investment, strategic
alliances..
15
B. Pricing
strategy
.15
C. Promotion
strategy
15
D. Product
strategy
..16
V. Legal
decisions
..16
A. Agent/distributor
agreements.
..16
B. Patent
.16

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C. Quality
...16
D. Dispute
resolution
.16
VI. Manufacturing and
operations
.16
A. Location of production facilities for
exports16
B. Capacity of existing
facilities
.16
C. Product modification necessary to adapt to local
environment.16
VII. Personnel strategies: Personnel needed to manage
exports.17
VIII. Financial
decisions
..17
IX. Secondary Market:
INDONESIA
17
X. Market conditions in
INDONESIA
.18
1. Existing
demand
.19
2. Competition
..19
3. Challenges
..19
XI. Marketing
decisions
.19

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A. Distribution
strategies
...19
1. Direct
exporting
..19
2. Documentation
...21
B. Pricing
strategy
.21
C. Promotion
strategy
21
D. Product
strategy
..21
XII. Legal
decisions
21
A. Agent/distributor
agreements
...21
B. Patent
.22
C. Quality
22
D. Dispute
resolution
.22
XIII. Manufacturing and
operations
..22
A. Location of production facilities for
exports..22
B.
Capacity of existing
facilities
..22

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C.

Product modification necessary to adapt to local

environment.22

XIV. Personnel strategies: Personnel needed to manage

exports.22
XV. Financial
decisions.................................................................................................................
.........23
XVI. Annexure: PO, Distributor Agreement, OFAC License, Sales Promotion
Agreement, MIS (FINANCES) - All
Iran
..24
I. PHARMA INDUSTRY
A. Key elements of the sector:
Among all the major industries in India, textiles and pharmaceuticals are surely the
leaders. The Indian government has listed the pharmaceutical industry as an
intellectual industry and investment in research and development has been
enhanced.
The pharmaceutical products account for 8 percent of the global pharmaceutical
sales and India is the fifth largest producer of bulk medicines in the world. In 2001,
the value of India's exports of medicines approached US$1.7 billion. This has gone
up to almost US $ 3.3 billion.
Indian Pharmaceutical Industry is estimated to be worth $ 4.5 billion, growing at
about 8 to 9 percent annually. It ranks very high in the third world, in terms of
technology, quality and range of medicines manufactured. From simple headache
pills to sophisticated antibiotics and complex cardiac compounds, almost every type
of medicine is now made indigenously.
There are 20,000 laboratories in India's pharmaceutical industry and the scale of the
pharmaceutical market amounts to Euro 5.3 billion. The leading 250 pharmaceutical
companies control 70% of the market with market leader holding nearly 7% of the
market share. It is an extremely fragmented market with severe price competition
and government price control.
Around 70% of the country's demand for bulk drugs, drug intermediates,
pharmaceutical formulations, chemicals, tablets, capsules, orals and injections is
met by home production. There are about 250 large units and about 8000 Small
Scale Units, which form the core of the pharmaceutical industry in India (including 5
Central Public Sector Units).
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B. Description of the product category and product:

ANESTHESIA
The word 'anesthesia' means 'loss of sensation'. Today, safe and effective methods
of anesthesia allow surgery to be performed on millions of patients each year. You
should know a few important things about anesthesia:

most importantly, it stops you from feeling pain and other sensations during
your operation

it can be given in various ways

not all anesthesia makes you unconscious

it can be directed to different parts of the body

Drugs that cause anesthesia work by blocking the signals that pass along your
nerves to your brain. When the drugs wear off, you start to feel normal sensations
again, including pain. Some of these medications work on your whole body. While
some of the medications work directly on the nerves going to parts of your body.
TYPES OF ANESTHESIA
General anesthesia is a state of controlled unconsciousness during which you feel
nothing and may be described as 'anesthetized'. For some operations, general
anesthesia may be the only option for safe care during surgery. In other operations,
general anesthesia may be an alternative to regional anesthesia. During general
anesthesia, anesthetic medications are injected into a vein, or anesthetic gases may
be breathed into the lungs. When these medications are carried to the brain by the
blood, they effectively "numb" the brain, and produce unconsciousness. Other
medications are given to prevent pain and relax the muscles of the body. During
general anesthesia, you may need assistance to support adequate breathing. In this
case, you may have a breathing tube placed after you have fallen asleep. General
anesthesia produces a period of controlled unconsciousness, which is quite different
from sleep, and is also different from unconsciousness due to disease or injury. At
the end of surgery, as the anesthetic drugs wear off, your consciousness starts to
return.
Regional anesthesia is the specialized use of local anesthetic to numb a part of the
body. Regional anesthesia can be used for operations on larger or deeper parts of
the body. Local anesthetic drugs are injected near to the bundles of nerves which
carry signals from that area of the body to the brain. The most common regional
anesthetics (also known as regional 'blocks') are spinal and epidural anesthetics.
These can be used for operations on the lower body such as Caesarean sections,
bladder operations or replacing a hip joint. You stay conscious but free from pain.

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Nerve blocks in the neck or armpit area are used to numb the arm or shoulder for
surgery.
Local anesthesia numbs a small part of your body. It is used when the nerves can
easily be reached by injections, drops, sprays, or ointments. You stay conscious but
free from pain.
Sedation is the use of small amounts of anesthetic or similar drugs to produce a
'sleepy-like' state. It makes you physically and mentally relaxed during an
investigation or procedure which may be unpleasant or painful (such as an
endoscopy) but where your co-operation is needed. You may remember a little
about what happened but often you will remember nothing. This is frequently called
'conscious sedation', and may be used by other professionals as well as anesthesia
professionals. If you are having a regional or local anesthetic, you may want to ask
for some sedation as well. Combining types of anesthesia: anesthetic drugs and
techniques are often combined. For example: a regional anesthetic may be given as
well as a general anesthetic to provide pain relief after the operation. Sedation is
frequently used with either regional or local anesthesia. The anesthetic prevents
you from feeling pain, while the sedation makes you feel drowsy and mentally
relaxed during the operation.

INHALATION ANESTHESIA: HALOTHANE, ISOFLURANE, SEVOFLURANE

Introduced in 1956, our most cost-effective inhalational agent.

A colorless, non-flammable oily liquid, CHBrClCF3; b.p. 51C. It smells like
trichloromethane and has a sickly burning taste. Halothane is widely used as a
general anesthetic, often administered also with oxygen and dinitrogen oxide.
It is apt for asthmatic patients due to bronco-dilatory action.
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Repeated exposure to halothane in adults was noted in rare cases to result in severe
liver injury.

Introduced in 1981, the most commonly administered volatile anesthetic today.

Isoflurane is a clear, colorless, volatile, non-flammable liquid for general inhalation
anesthesia. It is a general anesthetic for use in patients of all ages.
Uses
ISOFLURANE is a halogenated volatile anesthetic which induces and maintains
general anesthesia by depression of the central nervous system and resultant loss
of consciousness.
It is the most advantageous anesthetic agent for Neurosurgical patients. It is Ideal
for maintenance in cardiac surgery. ISOFLURANE should be used with caution in
patients with coronary artery disease.

Relatively low solubility and non pungency make sevoflurane an excellent choice for
inhalational induction.
It is a clear colorless liquid containing no additives. It is an inhalation anesthetic
agent administered by vaporization, for use in induction and maintenance of
general anesthesia in adult and pediatric patients for inpatient and outpatient
surgery. It is a dose related cardiac depressant.
II. Business history
PIRAMAL HEALTHCARE LTD.
Piramal Healthcare Ltd, a Piramal Group company, is a globally integrated
healthcare company that fulfills unmet medical needs across the world. It has a
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growth track record of above 29% CAGR since 1988.

Piramal Healthcare had consolidated revenues of US$ 656 million in FY2009. PHL is
currently ranked 4th in the Indian market with a diverse product portfolio spanning
several therapeutic areas. It is also one of the largest custom manufacturing
companies with a global footprint of assets across North America, Europe and Asia.
Divisions:

Acute-Care

Biotech

Cardiac

Cardio-Diabetes

Consumer Products

Critical Cardiology

Derma

Diabetes

General Medicine

Multi-Speciality

Multi-Therapy

Neuro-Psychiatry

Ortho

Pain-Management

Global Critical Care

Lab Diagnostics

GLOBAL FOOTPRINT

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Production Facilities of Piramal Health Care exist in:

Baddi, Himachal Pradesh

Digwal, Andhra Pradesh

Pithampur, Madhya Pradesh

Ahmedabad, Gujarat

Mahad, Thane in Maharashtra

Ennore, Tamil Nadu

Morpeth, UK

Grangemouth UK

Torcan, Canada

Piramal Healthcares Global Critical Care (GCC) business markets a range of

important hospital and life saving infusion pharmaceuticals. Our key customers
include pain management clinics, veterinary hospitals, university research centers
and medical industrial users.
With an aim to emerge as a global leader in this segment, we embarked upon a
string of Mergers & Acquisitions:

Rhodia, UK in FY2005

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PlasmaSelect AG, Germany in FY2008

Minrad Inc. and RxElite Holdings, US in FY2009

These strategic alliances have been consistent with the objective of recognizing the
compelling potential of our Global Critical Care business and emerging as a leading
player in this segment. In addition, our manufacturing JV in China in 2008 has
further helped us explore the enormous global opportunity in the critical care
segment.
The GCC product portfolio includes some key brands:

Inhalation anaesthetics
Halothane
Isoflurane

Polygeline based plasma volume expanders

Haemaccel

Highlights

3rd largest player globally in Inhalation Anesthesia (IA) market

Strong product portfolio with all 5 known IA gases

Global sales and marketing networks

Global manufacturing footprint USA, China and India

Haemaccel enjoys more than 70% share of the world market in Polygeline
based plasma volume expanders

III. Market Research

A. Target countries: Description about both the countries
1. Primary: IRAN
B. DESCRITION OF IRAN
Iran is a pluralistic society. Persians are the largest predominant ethnic and cultural
group in this country, though many are actually of mixed ancestry.
The 1979 Islamic revolution and the 1980-88 war with Iraq transformed Iran's class
structure politically, socially, and economically.

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The urban working class has enjoyed somewhat enhanced status and economic
mobility, spurred in part by opportunities provided by revolutionary organizations
and the government bureaucracy.
Most Iranians are Muslims; 89% belong to the Shia branch of Islam, the official state
religion, and about 9% belong to the Sunni branch. Non-Muslim minorities include
Zoroastrians, Jews, Baha'is, and Christians.
Economic Parameters
Population: 66,429,284 (July 2009 est.)
Population Growth Rate: 0.883% (2009 est.)
GDP (purchasing power parity): $841.7 billion (2008 est.)
Agriculture products include wheat, rice, other grains, sugar beets, sugar cane,
fruits, nuts, cotton; dairy products, wool; caviar
Industries include petroleum, petrochemicals, fertilizers, caustic soda, textiles,
cement and other construction materials, food processing (particularly sugar
refining and vegetable oil production), ferrous and non-ferrous metal fabrication,
armaments
Imports and Exports:
Exports: $95.09 billion (2008 est.)
Exports - commodities: petroleum 80%, chemical and petrochemical products, fruits
and nuts, carpets
Exports - partners: China 18.5%, Japan 15.4%, Turkey 6.9%, South Korea 6.8%, Italy
4.9% (2008)
Imports: $67.25 billion (2008 est.)
Imports - commodities: industrial raw materials and intermediate goods, capital
goods, foodstuffs and other consumer goods, technical services, Inhalation
anaesthesia (Halothane, Isoflurane)
Imports - partners: China 13.5%, UAE 9.8%, Germany 9.1%, South Korea 6.1%,
Russia 5.6%, Italy 5.1%, France 4.2% (2008)
C. Market conditions in IRAN
1. Existing demand: Out of the total demand for the category which was
200,000 bottles, Halothane had the highest share which is 180,000 bottles. The
market share is 95% in the same category for the entire world.

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Current demand of Halothane in Iran is 40,000-45,000 bottles a year.

The life of the product is of 5 years
Market type is Tender 70% and Private 30%
Number of hospitals- 20,000
More than 90% of the hospitals use Halothane
Number of Surgeries- 150,000
Number of anesthesiologist- 400
Association- Iran Anesthesia Association
Halothane is included in the Insurance list and is also listed as one of the Dangerous
Goods in the Exporting/Importing Items. Its one of the oldest molecules and has
been tested, used over 45 years.
Since the product has reached the end of Maturity stage in the market and is on a
decline on the PLC, 5 hospitals are changing to Isoflurane per year- this is the
internal objective of Association
Isoflurane is in the market for the last 6 years where as Halothane has existed in the
market for the last 45 years.
Piramal Healthcare is aiming at 20-25% conversion from Halothane to Isoflurane/
Sevoflurane.
In the market, generally semi closed/ closed type machine are to be found, 3000
anesthetic machine are old, recalibration is hence necessary. Imported machine cost
30k euro with vaporizer whereas local cost 12k euro which are bleez vaporizer.
There are in all 2000 Halothane vaporizer for which services are to be maintained at
all times by the distributor. Service cost is $100 which includes material plus $50
service charges. Generally- Hospital service is included with machine.
The product that is sold is pure but the artwork is different for all the markets.
2. Competition: There is no direct competition, though there are better quality
substitutes that are available. About 6 to 7 years back the Iran market was
completely Halothane market. In fact Piramal Healthcare produces a better
molecule product for the same use which eats up in Halothanes market share. The
competitions are
IRAN ANESTHESIA MARKET
Product
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Market

Import

Hospital

Competito

Market

Halothane
Isoflurane

Sevoflura
ne
Thio- 1 gr
Thio- 0.5
g
Propofol

Potential
80,000
160000

Price in $
13.18

Price in $
15.75

rs
Indirect
Baxter
Minrad

2000

220

300

Abbott

1.4
.80

Sandoz
Sandoz

650000
350,000
300,000

Share
100%
PHL- 67%
Baxter22%
Minrad11%
Abbott100%

Dongkook
Baxter

PHL acquired Minrad this year. After this the market share of Piramal has gone up in
Iran considerably but in Isoflurane category.
3. Strengths and weaknesses of the economy-barriers to entry, etc.:
The following are the setbacks for PHL:

Iran is a very restricted country- Banking being the biggest obstacle. None of
the banks in Iran are recognized in any European Country, United States,
India, etc. So, inevitably getting money out is very difficult. In Iran everything
works on U.S sanctions. Supplying to Iran is not difficult but getting Money
out is difficult. The reason being they cannot open an L/C in India as none of
the banks in India or U.S or U.K recognize any Iranian Bank like Bank Saderat,
Bank Sepah, Bank Mellat, etc. So PHL has a tie up with an agent based out of
Dubai which has an office in Iran.
Clause in Ministry of Health: One cannot supply one product to two different
distributors from the same site of manufacturing. So PHL operates through a
distributor called Dareyan Trading Co. Ltd, which is very strong in the private
market

IV. Marketing decisions

A. Distribution strategies:
1. Direct exporting: Piramal follows an indirect selling method in Iran. They
have a tie up with a distributor based from Dubai. So the letter of credit is opened at
Dubai.
PHL contacts the distributor/agent; an executive visits from PHL and finds out what
is the demand in Iran. Once this is done, the order is placed. PHL gives an FOB or
CIF shipment, the agent open an L/C in Dubai. The agent opens either a back to
back L/C which is a little complicated due to the documents involved as PHL makes
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the documents according to the L/C given to it by the agent. After which the agent
makes the changes in the documents according to the distributor- so there is a lag.
Typically the transit of the product from India to Dubai takes 7 days and from Dubai
to India takes 14 days (shipment). So the product reaches them in 20-25 days but
the documents in back to back L/C take 40-45 days, hence the goods are lying at
the port, the demurrages are being paid.
So what is done is the purchaser opens an L/C with the agent in Dubai and PHL
works on it. The agent and PHL works on D/A terms, it is largely trust based.
The following are the registered Agent and Distributor for Piramal Health Care Ltd.
in Iran.
Halothane

Agent/
Distributor
IPI
Dareyan

Registration
Yes
YES

Site of
Manufacture
Ennore
Digwal
(Hyderabad)

Let us look at their functioning after the goods reach IRAN

IPI- Pasteur Institute of Iran (IPI) in cooperation with Health Ministry

In IPIs case money comes after 8 months of delivery and the supply is from
different site which is Chennai (keeping in mind the clause of MOH)

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In Iran, the influence of Key Opinion Leaders (KOL) makes a huge difference. If one
can tap the top 10 influencers, the business will definitely do well. So convincing
them is important.
There is Corruption as its indirect form of selling.
Dareyan Trading Co. Ltd

The sales force is also in charge of maintaining vaporizers which is the augmented
product to have the core product in place. If this fails the competition comes in and
acquires that customer.
Dareyan has a further network of local distributors who has the logistics in place to
transit the goods further and identify the inventory stock in Hospitals and thereby
supply where ever there is shortage.
So the distribution flow looks like:

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2. Documentation: The product explicitly says that Manufactured by Piramal

Health care but distributed by Dareyan.
There is a sales promotion agreement, purchase order, artwork for Iran,
draft of Agreement for the distribution and a copy of the license (Iranian
Transactions Regulation from the department of the Treasury) as annexure
to this report.
Note: That some data was not shared with us by PHL which they have cut in those
documents.
3. Direct investment, strategic alliances: Recently PHL acquired Minrad.
B. Pricing strategy: It is Market Based. The import duties + clearance+
customs+ salaries and other expenses account for 21% for the agent, so PHC has to
price it accordingly seeing the above mentioned factors for getting the product in
Iran. After this the mark up comes in picture for the agent, distributor, sales force,
hospital and then the end consumer. The Cost to Company was not disclosed to us,
but in Iran market the 250ml bottle is charged at 11 euro to the agent.
C. Promotion strategy: The Distributor takes part in Conferences, Seminars and
Workshops. An Endorsement from Iran Anesthesia Association works all the way.
Other promotion includes printed pamphlets, brouchers, gifts, service of the
vaporizer and sometimes even the vaporizers are donated to Hospitals.
Even the executives from PHL go to Iran for a more direct promotion, which is more
like relationship manger.

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Out of the 400 anesthesiologists in Iran- 10 are the President, Secretary, Vice
President in the Iran Anesthesia Association who if convinced leads to great
business.
D. Product strategy: Banks on the proposition of Fits all pockets
V. Legal decisions
A. Agent/distributor agreements:
There is an agreement document with agents and distributors which has the
following very important factors:

Termination clause (in Piramals favor)

Minimum Order Quantity (MOQ) has to be met always. Its on a 3 year basis,
if the distributor does not meet the requirement for the two consecutive
years, the distributor is terminated
Ministry of Health states that one cannot supply to 2 distributors from the
same plant site

A copy is attached in the annexure.

B. Patent: Halothane is a generic product and is sold in the pure form. It is off
patent for the last 45 years. It is not sold over the counter.
C. Quality: The product is of good quality. It is certified by
US FDA (United States)
UK MHRA (United Kingdom)
TGA (Australia)
MCC (South Africa)
D. Dispute resolution:
The entire operation happens through a trust based relationship. But there have
been certain disputes. For e.g. a year back there was a problem in the L/C opening.
After the Purchase order was sent to PHL which then gets stamped, goes to the
bank, notifies PHL of the inspection agency in India (Branch of Iranian inspection).
At this point the Documents went missing, and during this time the L/C lapsed. But
the sale was already made in PHLs books of accounts. This led to extending L/C for
another 6 months.
Till date there have been no big disputes and litigations. Resolving of issues happen
amicably as it is a trust based process.
VI. Manufacturing and operations
A. Location of production facilities for exports: Digwal, Hyderabad

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B. Capacity of existing facilities: 500 tons of Halothane

C. Certification:
Audit by:

US FDA (United States)

UK MHRA (United Kingdom)
TGA (Australia)
MCC (South Africa)

VII. Personnel strategies:

Personnel needed to manage exports: PHL has dedicated Commercial teams
working on different countries. The country managers visit Iran once in 6 months to
discuss issues if any.
VIII. Financial decisions:
A document on the MIS (finances) which was shared with us has been attached as
an annexure.
The product Halothane is seeing a negative growth though it is still very high. The
degenerating growth is about 15% as the product is in the decline phase now.
The sale of Halothane
Year
Halothane

05-06
110000

06-07
-

07-08
89000

08-09
50000

IX. Secondary Market: Indonesia

With a population of almost 200 million people on 13,667 islands, Indonesia is the
world's largest archipelago located between the continents of Asia and Australia,
and between the Pacific and the Indian Oceans.
Only 35% of the population live in urban areas, but there are more than 30 cities
with 100,000+ populations. Plus, five cities have a population of over one million.
They are Jakarta, Surabaya, Bandung, and Semarang, and are all located on Java.
Although the population has a significant Malay heritage, it is also diverse with over
300 distinct cultures residing within its borders. With each culture comes a unique
language or dialect; however Bahasa Indonesia, the common language of the
country, unites everyone. In tourist areas and population centers English is the most
commonly spoken second language.
Though the large majority of Indonesians follow the Islamic faith (85%), the intensity
of their observance for their faith varies due to the large diversity within this nation,
Christianity a distant second (10%).
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Economic Parameters:
Population growth rate- 1.136% (2009 est.)
GDP (purchasing power parity)- $914.6 billion (2008 est.)
GDP - real growth rate: 6.1% (2008 est.)
GDP - composition by sector: agriculture: 14.4%, industry: 48.1%, services: 37.5%
(2008 est.)
Agriculture products include rice, cassava (tapioca), peanuts, rubber, cocoa,
coffee, palm oil, copra; poultry, beef, pork, eggs
Industries include: petroleum and natural gas, textiles, apparel, footwear, mining,
cement, chemical fertilizers, plywood, rubber, food, tourism
Imports and Exports:
Exports: 139.3 billion (2008 est.)
Commodities Exported: oil and gas, electrical appliances, plywood, textiles, rubber
Exports - Partners: Japan 20.2%, US 9.5%, Singapore 9.4%, China 8.5%, South Korea
6.7%, India 5.2%, Malaysia 4.7% (2008)
Imports: $116 billion (2008 est.)
Commodities Imported: machinery and equipment, chemicals, fuels, foodstuffs,
Inhalation anaesthesia (Halothane, Isoflurane)
Imports - partners: Singapore 16.9%, China 11.8%, Japan 11.7%, Malaysia 6.9%, US
6.1%, South Korea 5.4%, Thailand 4.9% (2008)
X. Market conditions in INDONESIA
1. Existing demand: 20,000 bottles in 2008-09
HOSPITALS:
Approximately 1,274 hospitals (Indonesian Hospitals Association, an umbrella
organization)
o Government owned = 40.92%
o Military organizations owned = 9.08%
o Private companies = 50%
The extremely popular Indonesian Red Cross or commonly known as Palang
Merah Indonesia is a non-profit organization that owns a general hospital in
Bogor located in West Java
Indonesian Hospitals Association:
o Works in collaboration with the government of Indonesia to promote
national health care programs
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Provides technical consultations in order to help the local hospitals to

improve its management skills
Islamic Hospitals Foundation is the organization for Islamic hospitals of
Indonesia.
o

IHA STRUCTURE:

Total Market value: $8.35 Million

2. Competition: Aventis had halothane last yr old stock which they were
disposing off now Piramal is the only one in the market and hence a market
leader in the molecule.
There is no other company manufacturing this molecule. Hence no direct
competition.
But Isoflurane Baxter, Abbott, Minrad is eating up halothane market as
they are better substitutes. PLC is towards a decline.
3. Challenges include the lack of awareness among the Anesthetists about
the availability of 3 molecules in the segment.
XI. Marketing decisions
A. Distribution strategies
1. Direct exporting: The Importer for Piramal Healthcare in Indonesia is Dexa
Medica

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It is an established business. The appointed distributor (DEXA) is the market

authorization (MA) holders. Nicolas team discusses the budget and stock situation
with the Dexa purchase team -what is the order situation after discussing with
domestic team as per the forecasts in Indonesia and send a PI- Dexa raises a
purchase order in Nicolass name -Nicolas teams checks if the shipment terms
,payment terms are in place signs & sends after approval scanned copy for their
records -Export team checks the time of arrival and volume of order- the export
team sends the order at the factory as the art work is specific to the Indonesia
market-Raises Sales order in SAP-Plant people label and send it to the port.
DA mode of payment .Payment is made after 90 days of the shipment.

Laws are that the importer cannot directly be the distributor .There has to be
another country distributor to supply to the Hospitals.
Exception:
But if a company registers itself and sets up office then it can carry on
marketing activities.
E.g.
Abbott can market their product in the country as they have set up an office.

Dexa Medica has evolved from a small company established in 1969 to one of
Indonesias largest ethical pharmaceutical companies at the beginning of the
21st century and has become a prominent, well-respected player in the
domestic pharmaceutical market.
Providing better health care by applying expertise was the foundation on
which its founders built this Company. Honesty, trust, dedication and
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commitment to providing patients with the highest quality of ethical

pharmaceutical products are preserved as the guiding principles, based upon
which the highly professional management team and the motivated,
competent staff of Dexa have developed the Company in the spirit of mutual
respect, teamwork and innovation over more than three decades.
Serving as a good corporate citizen is one of our responsibilities and being a
strategic asset of Indonesia is one of our foremost desires. For along time
Dexa has worked together with governing institutions and the Indonesian
Pharmaceutical Association championing compliance and improving the
industry standards.

Dexa had a contract with Rodia which was acquired by Piramal in 1995 hence the
contract with Nicolas.
A Typical Order Process in Indonesia:
Nicolas team discusses the budget and stock situation with the Dexa purchase team
-what is the order situation after discussing with domestic team as per the forecasts
in Indonesia and send a PI- Dexa raises a purchase order in Nicolass name -Nicolas
teams checks if the shipment terms ,payment terms are in place signs & sends
after approval scanned copy for their records -Export team checks the time of
arrival and volume of order- the export team sends the order at the factory as the
art work is specific to the Indonesia market-Raises Sales order in SAP-Plant people
label and send it to the port.
2. Documentation: Its on the D/A system. Largely trust based.
B. Pricing strategy: $80-$100 per bottle
C. Promotion strategy: The distributor is also a sister concern of Dexa which
markets the product by participating in symposiums and conferences.
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Networking with Key Opinion Leaders and Focused Anesthetists., New

Vaporizer Installations in Key Hospitals, CME at all levels & build relationship
with Paramedics.
D. Product strategy: Positioned as Fits all pockets
XII. Legal decisions
A. Agent/distributor agreements: There is an agreement document with agents
and distributors which has the following very important factors:
Termination clause (in Piramals favor)
Minimum Order Quantity (MOQ) has to be met always. Its on a 3 year basis,
if the distributor does not meet the requirement for the two consecutive
years, the distributor is terminated.
B. Patent: Halothane is off patent
C. Quality: The product is of good quality. It is certified by
US FDA (United States)
UK MHRA (United Kingdom)
TGA (Australia)
MCC (South Africa)
D. Dispute resolution: The framework is trust based, so any dispute which occurs
is resolved amicably.
XIII. Manufacturing and operations
A. Location of production facilities for exports: Digwal, Hyderabad
B.
C.

Capacity of existing facilities: 500 tons of Halothane

Product modification necessary to adapt to local environment: Only the
artwork is changed.

XIV. Personnel strategies: Personnel needed to manage exports: Piramal has a

dedicated Commercial team who focus on each country.
The country managers, an executive from Piramal visit Indonesia once in 6 months
to discuss issues and survey the market.
XV. Financial decisions: Drug Price Components (Assumption based)
Mark up Cost
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Assumption

Assumption

The
manufacturers

$ 100

$ 100

selling price
(bases)
Distributor

Profit Margin 5%

(In this case, it

5% 20 %
includes subdistributor
margin. This may
go as high as
40%)
VAT 10%

Retail pharmacies VAT 10%

10%

10%

and hospitals

Profit Margin 20%

20% 35 %

Dispensing
fee
The prices that customer have
to pay

20% 20

----------

--------

105

120

10.50

12

--------

---------

115.50

132

11.55

13.20

---------

------------

127.05

145.20

25.41

35% 50.82

----------

-----------

152.46

196.02

Small fixed amount

$ (152.46 196.02) + dispensing fee

There has been 20% de-growth in the Halothane sales due to maturity- decline
phase.

XVI. Annexure (All Iran)

1) Purchase Order
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2) Distribution Agreement
3) Office of Foreign Assets Control (OFEC)- Iranian Transactions
Regulations
4) Sales Promotion Agreement
5) MIS Finances

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