“India lives in its villages.”

- Mahatma Gandhi

And after so many years, we still wonder – is

there a business in rural markets?

According to census 2011, out of 1.2 billion

Indians, 68.84% live in Rural India.

Rural India is undergoing a tremendous

change – machines are replacing man and

tools and as a result farmers and their families

have a lot of time for non-farming activities.

According to census 2011, 91.21 million

households in rural India have access to

phone, compared to 64.67 million households

in Urban India. Computer is not a magic-box

or a genie for a rural folk anymore. There are

8.64 million households with a computer in

rural India. Internet usage in rural India has

overtaken usage in urban India - more Internet

IS THERE BUSINESS

users in rural India than in urban. TV and dish antennas are common sight in

rural India. 56 millions households have a TV, compared to 60 million

urban households.

Government is aggressively spending for rural development. Active steps

are being taken to improve healthcare. Rashtriya Swasthya Bima Yojna

(RSBY) was launched in 2008. Its purpose is to cover all BPL families with

a health insurance of Rs. 30,000/ (government or private hospital treatment,

no age limit and pre-existing ailments are also covered).

One thousand more PG seats are sanctioned for private medical colleges,

and 4000 more seats are created in existing government colleges. Land

required to open a medical college is being reduced from 25 to 20 acres. To

meet the shortage of teachers in medical colleges, age-bar for faculty posi-

tion is being increased from 65 to 70 yrs. To encourage rural healthcare,

50% PG seats are allocated to doctors working in rural areas.

There is narrowing of rural urban divide due to:

1. Better income from farming

2. Increasing income from non-farming avenues and immigrants

3. Industry projects in rural areas

4. Infrastructure development

5. Increase in literacy and awareness

6. Affordability of technology & white goods

Dr. Surinder Kumar Sharma

IN RURAL MARKETS?

Medicin Man

“According to census

2011, 91.21 million

households in rural India

have access to phone,

compared to 64.67 mil-

lion households in Urban

India. Internet usage in

rural India has overtak-

en usage in urban India.”

MedicinMan August 2012 >>> Lead Article MedicinMan August 2012 >>> Lead Article

Read the complete issue online at www.medicinman.net

Dr. Surinder Kumar Sharma

Income from non-farming sector is increasing. Now

around 50% income in rural India is being generated from

trade, food processing, industry, and money brought back

by emigrants. Better procurement prices for crops, a run of

good monsoons, cash crops, etc. have increased disposable

income. Rural folks are buying cars, flat screen TVs, mi-

crowaves and high-end mobile phones. Rural income is

43% of national income. In terms of absolute numbers dis-

posable income and middle class is more in rural India.

Literacy is improving in rural India - there are 493 million

literates in rural India, 285.4 million in urban.

In spite of its huge potential, as indicated by various pa-

rameters mentioned earlier, rural markets‟ contribution to

pharma remains abysmal; even its growth, over the past

few years, has been suboptimal. What are the factors that

are preventing the rural pharma market to achieve its po-

tential?

Road Blocks

Inadequate Infrastructure

There are gaping holes both in government as well as pri-

vate sector‟s initiatives to create a good healthcare infra-

structure. There are gross inadequacies - be it the number

of hospitals, dispensaries, staff, or doctors (only 1 doctor

per 3000 people in rural area, compared to 2/3000 in ur-

ban). Quacks rule the roost. 60% of rural diseases do not

get treated at all.

Lack of awareness

Lack of awareness towards diseases, even the highly prev-

alent ones, continues. Superstition and belief in witchcraft

is still rampant. Most of folks still believe that diseases are

due to God‟s curse, and have fatalistic attitude towards

health and disease.

Lack of affordability

Many drugs remain expensive. Rural masses have stronger

value for money. A few days‟, or a little, suffering is pre-

ferred to spending money on medicines.

Poor accessibility

Highly disbursed markets make distribution expensive and

a logistic nightmare. Maintaining cold-chain or special

storage conditions is a challenge due to erratic electricity

supply. To establish a dependable distribution system in

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2009 2010 2011 2012

RURAL

CLASS II TO VI

METROS

CLASS I TOWNS

interiors one needs strategic approach, rather than tactical,

as ROI period is long.

What is the way forward?

To develop rural markets, one needs a multipronged ap-

proach, and need to:

1. Improve Healthcare System

2. Create Awareness

3. Provide Affordability

4. Ensure Accessibility

Improving healthcare system

It shall be viewed as a community responsibility and cor-

porations shall take active responsibility. Various steps that

can be taken to develop and robust healthcare system in

rural India are:

1. Partnering with government, NGOs and other key

stake holders

2. Training rural doctors and supporting staff

3. Providing microfinance to doctors, retails, etc. to cre-

ate healthcare infrastructure

Some of the initiatives taken in this area are:

1. MSD India launched Project Transcend, a program to

train GPs on evidence based management of diabetes.

2. Sanofi Aventis‟ PRAYAS - a program to meet rural

India‟s healthcare needs and to bridge the gap by train-

ing rural doctors - plan to train 150,000 doctors across

India.

Creating awareness

1. Educating rural masses about safe and reliable reme-

dies for common ailments

2. Partnering with rural institutions and NGOs

MedicinMan August 2012 >>> Lead Article MedicinMan August 2012 >>> Lead Article

Read the complete issue online at www.medicinman.net

To maintain the tempo generated by

Brand Drift and FFE 2012, MedicinMan will

be hosting the 1st BREAKFAST FOR THE BRAIN on

Friday 7th September 2012 in Mumbai from

0830 AM to 1000 AM.

Where Pharma Business Leaders Brainstorm

BBBREAKFASTREAKFASTREAKFAST

BBBRAINRAINRAIN

Dr. Surinder Kumar Sharma is Head - Strategy &

Business Development, TTK Healthcare Ltd

3. Making use of annuals fairs, weekly haats and man-

dis to spread awareness

Some aspiring initiatives, which have done good to

both company as well as masses are:

1. Novo Nordisk Education Foundation is undertaking

massive diabetes control program that involves

screening, spreading awareness and training doc-

tors.

2. SPARSH, a multilingual helpline for diabetics to

support Januvia and Janumet.

3. NPL had run „Teach more, reach more‟ campaign

to educate masses about epilepsy.

4. J&J‟s Mobile health for mothers helped many.

Providing affordability

1. Making medicine more affordable is very im-

portant. Companies can think of differential pricing

strategy for rural areas, e.g. Microsoft has low pric-

es for its products for students.

2. Rural healthcare insurance can help decreasing the

burden of payment on the individuals

3. Training medical staff for cost effective disease

management may help in establishing trust in allo-

pathic medicines.

Arogya Parivar (Healthy Family), a low-profit social

initiative developed by Novartis, is a good example.

This program is proved to be a commercially sustaina-

ble program.

Ensuring Accessibility

Highly disbursed market and thinly populated area make

setting an effective distribution system a nightmare. Main-

taining cold chain etc becomes very difficult due to frequent

power failures. Various options could be:

1. Company delivery vans

2. Pooling of resources by collaborations between compa-

nies to set up viable distribution channels

3. Developing products suitable for rough storing condi-

tions

4. Mobile clinics and mobile pharmacies

5. Post offices duplicating as pharmacies

Ranbaxy and Pfizer have formalized an alliance with ITC to

penetrate the rural markets for their over-the-counter (OTC)

products.

Traditionally Indian companies, especially mid- & small-

size, have a better penetration in rural and class II-VI mar-

kets. Now multinationals (Indian & foreign) are becoming

more aggressive in these markets. Every other day, there is

news of some or other company hiring to enter into rural

markets. In view of these developments, mid- & small-size

companies need to be proactive to make the most of the new

markets created by these companies and, more importantly,

to protect their current business in these markets.▌

MedicinMan August 2012 >>> Lead Article

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