Management
PHARMA INDUSTRY
The local pharmaceutical sector is marked by intense competition, due to
the sheer presence of a number of companies and products in the industry.
The extent of competition can be judged by the fact that no single firm
holds more than 7% of the market share. The industry is dominated by
multinationals companies and the table below shows the share of MNC‟s
versus the local operating units.
Industry structure
Companies Number Market
Share
MNCs 29 59%
Locals 272 41%
Source: IMS-PKPI, Quarter 1, 1999
The major market leaders in the industry are MNCs such as
GlaxoWelcome, Hoechst Marioun Rousell, Smith Kline & Beecham while
local companies are not present in the top 10 companies with respect to
sales, in Pakistan.
Top 10 Market Players
Rank Company Market
Share(%)
1 Glaxo Welcome 6.6
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2 Abbott Laboratories 5.5
3 American Home Products (Cynamid parent 3.9
company)
4 Smith Kline & Beecham 3.6
5 Hoechst Marrion Rousell 3.3
6 Merck Marker 3.2
7 Bristol Myers Squibb 3.2
8 Sandoz 3.1
9 Roche 2.6
10 Merck Sharp Dohme 2.4 Source: IMS-PKPI, Qtr-1’99
As the companies in the industry face similar restrictions and regulations
the difference in performance can be attributed to factors such as diversity
of product line, the product mix, management‟s expertise, percentage of
foreign and local components in raw materials and financial performance
of the company. The MNCs compete on the basis of innovation and spend
heavily on R & D. Due to the presence of multiple brands in each
generic/therapeutic group, the consumers are highly price sensitive. The
government has enforced strict price regulations and as a result there has
been no across the board price increases since 1996, which has eroded the
profitability of pharmaceutical sector.
MARKET POTENTIAL
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The Pakistani consumer spends approximately Rs. 0.75 per day (equaling to Rs. 270 per year) on pharmaceuticals. Furthermore the local market accounts for only 0.3% of the total world market and as such is insignificant for the parents to invest in. In addition to this the inconsistency of government policies has encouraged a bias towards formulation and packaging rather than basic
manufacturing. At present there are only four basic manufacturing units in Pakistan (GlaxoWellcome, Alpha Chemical, Himont &
Army welfare Trust) and 31 semi-basic manufacturing units.
CURRENT SCENARIO
The competition in the industry is based on quality and introduction of new products as the prices competition is are controlled by the government. The MNCs usually import from their parent or associated companies, and this accounts for more than 70% of their costs (source: Industry Overview; SCB). The raw material bought locally comprises of bottles and packaging material. These purchases from raw material suppliers are in small quantities and as such no one supplier has a major share/ control over the majority of input.
The industry suffers from continuous devaluation. As a majority of raw materials are imported, the companies cost increases in proportion to the devaluation of the Rupee. In the previous years rupee erosion has been approximately 10% per annum. Due to price regulations the companies have not been able to pass on the cost increases and had to bear the major brunt which is cutting into the company‟s profit.
There is increasing proliferation of alternative medication in the form of hikmat, and homoeopathic due to falling income levels of the population. This is eating into the market share of pharmaceutical companies. Furthermore the local pharma companies engage in unethical practices
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and offer various incentives and benefits to doctors and physicians to
push their products.
PARKE-DAVIS
Parke Davis was established in the USA in 1866and is considered to
be one of the largest manufacturers of pharmaceutical and
biological preparations in the world.
Parke Davis‟s corporate promotes a management style which
emphasis quality and reliability. This has earned the company, a
leading position in the pharmaceutical industry all over the world.
Parke Davis is an integral unit of the Warner-Lambert Group. The
world wide operations of the Warner-Lambert Group are spread in
more than 140 countries. The Warner-Lambert Group, has the
research and technical support of four major Research centers and
more than 100 manufacturing facilities. Approximately 45000
people work world wide for Warner-Lambert Group.
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Parke Davis is responsible for introducing the principle of
standardization in medical products that every lot produced has the
same strength or potency as every other unit.
Parke-Davis Pakistan (Pvt.) Ltd.
Parke Davis was incorporated in Pakistan as a Private Limited
Company in 1960. The production facility was constructed in 1963,
ensuring local production of a wide range of Parke-Davis world
renowned products, previously imported costing a huge sum of
Foreign Exchange.
Parke Davis has a Philosophy of world wide standardization with
the same quality standards maintained at all production facilities
operating under its license. The local production plant is capable
of maintaining the same standard and quality of products, as those
produced any where else in the world.
Parke-Davis Pakistan Public Ltd.
The initial Public offering was announced in June 1983 and Parke
Davis Private Limited was converted into the public limited
company. Parke-Davis Pakistan Public Limited Company acquired
the shares of Warner-Lambert(Pak) Limited and the restructuring
process was finalized in November 1984.
The company was declared amongst the top 25 companies by the
Karachi Stock Exchange for the three consecutive years i.e: 1984,
1985, 1986.
Mission Statement
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Balancing Wellness and Life.
"The patient is waiting." At Parke-Davis, we recognize the urgency
to create breakthrough medicines. We're committed to helping you
and your family balance wellness, longevity and quality of life.
Parke-Davis, a division of Warner-Lambert, is devoted to
discovering, developing, manufacturing and marketing quality
pharmaceutical products.
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Safety and Environment
Parke Davis has booked investment of Rs. 278 Million for improving productivity, enhancing GMP, Safety and Environment and bringing the latest MIS solutions. GMP, Safety and
Environmental compliance is the foremost criteria of performance and waste management program. Whereby all types of industrial waste is either recycled or incinerated in worth emulating other companies. "PRISM" is the only one of its kind of integrated software in Pakistan.
Brands
Parke Davis & Company limited is operating in Pakistan for the last 34 years. The company is successfully manufacturing and marketing 30 products.
The leading brands of Parke Davis are:
? Ponstan
? Cholormyecetin
? Basoquin
? Benadryl
? Mylanta-2
The recent launches in Cardio-vascular therapeutic group also attained significant success in their respective categories.
Management Philosophy
The bottom line success of Parke-Davis is a result of its management philosophy. The management of Parke-Davis has
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implemented MVP (management value practices) which can be summarized as under:
? Prize creativity
? Be fast and first to opportunity ? Focus on what is important ? Be open and candid
? Reward true success
The management at Parke Davis has gone a step further and virtually redefined the way things are done at the company. New Values were introduced and work behavior redefined. They have set ever higher standards of performance.
They care for the people so much that they have even changed the word for how they regard one another. Not as employees - but as colleagues.
The people at Parke-Davis are following the motto:
" We are making the world feel better "
Parke-Davis was also awarded Excellence Certificate for the 1987 and the coveted Corporate Excellence Award for the year 1994, 1995, 1996 by the Management association of Pakistan.
International Corporate Philosophy
Parke-Davis being a Division of Warner-Lambert shares the same International Corporate philosophy. The company aspires to be a world market leader in consumer health care products. The company derives its competitive edge from its superior research and development facilities.
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Parke-Davis products are favorably positioned for growth throughout the world. Demand for these products is being driven by a number of favorable environmental factors.
Aging populations in many parts of the world are increasing the need for prescription pharmaceuticals. The trend toward self-medication likewise has spurred interest in the company's expanding line of consumer health care products.
Meanwhile, the emerging markets of Asia, Europe and Latin America provide a large number of new consumers, due to increasing health consciousness and health care facilities fuelled by the technological advancements by lowering the cost of these products.
Parke-Davis has the people and the strategies in place to swiftly and fully capitalize on these and other global growth opportunities. It also has products capable of being expanded worldwide--brands of high quality and value that help people throughout the world feel
better.
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Organizational Structure
Parke Davis is built around six traditional departments. Each
department has various divisions based on their specific activities.
The departments are: Marketing (Ethical Products), Marketing
(CHPG), Finance, Quality Assurance, Plant and Human Resources.
The sales team comprise of Medical sales representatives. The
Medical sales representatives report to district field office who
reports to regional sales manager. There are four regional sales
manager posted at Lahore, Rawalpindi, Quetta and Peshawar. All
these regional units are under National Sales manager reports to the
Marketing (Ethical products) department.
Parke Davis Pakistan Private limited employees around four
hundred employees, with number of temporary employees varying
every day. The non-management employees are around two
hundred along with seventy female employees. The field force
comprise of about sixty individuals posted outside Karachi.
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