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PARKE-DAVIS

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PARKE-DAVIS ...

     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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