Term Report - Final Mbr

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Business ResearchBusiness ResearchMethodsMethods

Term ReportTerm Report

SHRINKING MARKET OFSHRINKING MARKET OFHERBAL PHARMACOPOEIAHERBAL PHARMACOPOEIAMEDICINES IN PAKISTANMEDICINES IN PAKISTAN

Submitted to

Professor Akhtar Ehsan Mirza

Submitted by

Syed Asad Mehmood (MEN-2200475)

Mohammed Furqanuddin (MEN-2200462)

Qazi Noman Imtiaz (MEN-2200471)


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TABLE OF CONTENTS

1. Preface 1

2. Problem: Shrinking Market of Herbal PharmacopoeiaMedicines in Pakistan

23. Unani Tibb an overview

34. Status of Unani Tibbi Medicines Practices and Medicines

in Pakistan 35. Causes of market shrinkage

5a. Current Status of Unani Tibb

5i. Rivalry Factor

5ii. Role of Herbal Medicine manufacture

5iii. Role of Quacks

6iv. Spurious medicines

6v. Herbal medicines not always safe

6vi. Counterfeit Medicines

6b. Marketing Practices

7i. Selling Tactics

7ii. Competition Avoiding Tactics

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c. Lack of Intuitive Research and developmentactivities. 7i. Backward packaging style

7ii. Lack of Market Development oriented

research 8

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iii. No Technological Improvement 8

d. Role of Regulatory Bodies8i. Ineffective enforcement of relevant

legislation 8ii. Lesser coordination between regulator and

Manufacturers8

iii. Lesser role of ministry of health 9

6. The way forward9

a. Manufacturers Responsibilities 9

b. Authorities Responsibilities10

7. Conclusion 10

8. Bibliography 13

9. Acknowledgement 14

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PREFACE

In this report, we try to evaluate the under discussion issue inthe perspective of modern days businesses hyper competitionthat forces to businesses to thinned its margins considerably.That also shows the clear power shifting to customers, whoare increasingly telling companies what product features theywant, what communications they will tolerate, what incentivesthey expect, and what prices they will pay.

This research report is by method a Causal-Comparativestudy, in which we have identified an effect that isShrinkage of Herbal Pharmacopoeia Medicines MarketSize and dig out possible causes. We have tried our bestpossible efforts to explore, and discuss cause-effectrelationships.

In preparation of subject research report, we have conductedsurvey of Medicines wholesaler and retailers of Nazimabad, Joriabazar, and Liaqatabad, and representatives of HerbalMedicines manufacturers in order to get the reliableinformation; hence these peoples are our source of primarydata.

In preparation of that report, we want to give specialacknowledgement to our course facilitator Professor AkhtarEhsan Mirza, who had a great influence on our thinkingtowards subject of Business Research.

Syed Asad MehmoodMEN-2200475

Mohammed FurqanuddinMEN-2200462


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Qazi Noman ImtiazMEN-2200471

Problem : Shrinking Market of Herbal Medicine inPakistan

Over the year we have witnessed a great worldwide revival ofinterest in the use of herbal medicines both in developed aswell as developing countries, according to WHO, 80% of theworld population rely chiefly on plant based traditionalmedicines specially for their primary health care needs. Theinternational scenario is:America: Herbal medicines continue to grow enormouslyover the years and continue to be a major market in USpharmacies and constitute a multi billion dollar industryselling approximately 1500 botanicals and dietary

supplements or ethnic traditional medicines.United Kingdom: Sale of herbal medicines in the UKincreased at the ratio of 5% per since 1990.Germany: Over 70% of German physicians either prescribesmedicinal herbs or refer their patients to traditionalpractitioners.China: Herbal medicines represented 33.10% of the totaldrug market in 2000s.Japan: Herbal medicines constituting about 4% of the totalmarket for pharmaceutical products in 2000s.India: 70% population is reported using traditional medicine

for primary health care.

Although in Pakistan situation is not so worsen for wholeherbal medicines market, but for pharmacopoeia medicines(Hamdard Pharmacopeia of Eastern Medicines lists 186 singlevegetable drugs used exclusively as unani medicines in

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various forms i.e. majons, khamiras, jawarish, oils, arqiat,syrups etc) situation is alarming. As per our survey, the saletrend of 10 major dawakhanas (herbal medicinemanufactures) are on decline side year-by-year. The Market shrinkage of Herbal Products (PharmacopoeiaMedicines Majons, Khamiras, Syrups) is evident from the factthat, both major players of the market are comprehensivelyon middle men disposal, which market player gave thembetter financial incentive middle men sell their products. Bothmanufacturers are year-by-year deploying and employingTrade (Middle Man) Beneficial Marketing Strategies.

Intermediaries focus strategy pushing end-user/consumeraway from manufacturers. Companies at market declinestages use to ask consumers what benefits they would likeadded to the product, that benefits could be added at anylevel, it will particularly proved useful at Augmented andPotential product levels

Major manufacturers are keen to avoid competition, becauseit is very well understood that, any effort to reduce the shareof competitor, will lead towards further shrinkage of themarket. They are happy and well satisfied with cold war likestrategies. Unavailability of ideal and healthy competitionfurther leading the whole market towards the decline,because competition produces a continuous round of newproduct attributes. If a new attributes succeeds, competitorssoon follow and then offer it.

Unani Tibbi an overview

From centuries, man has used self-coined traditional meansfor treating for ailments, and continues to use them along sidemodern medicine even today. Despite all the marvelous

advancements in modern medicine, traditional medicine hasalways been practiced. Traditional medicine refers to healthpractices, approaches, knowledge and beliefs incorporatingplant-, animal- and mineral-based medicines, spiritualtherapies, manual techniques and exercises, applied singly orin combination to treat, diagnose and prevent illnesses ormaintain well-being.

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The herbal or Unani or Grecoarab system of medicine is agrowing industry worldwide. Global sales of herbal productsnow exceed a staggering US$40 billion a year. Pakistan has avery rich tradition in the use of medicinal plants for thetreatment of various ailments, based predominantly on theUnani system of medicine, which dates back to the Indusvalley civilization.

Status of Unani Medicinal practitioners and Medicinesin Pakistan

Pakistan has current population of 162 million growing at arate of over 2% per annum making it the fifth largest countryin the world. With the low literacy rate of around 30% and withover one-third of the population falling below the officialpoverty line it is not surprising that Pakistan has one of thehighest infant mortality rates in the world. The life expectancyat birth is around 63 years. Fortunately, the economicrecovery in Pakistan is robust with around 6% real GDP growthand per capita income of around $2,200 [CIA World Factbook].The annual GDP of Pakistan stands at around $370B of whichless than one billion is spent on pharmaceutical purchases(not included traditional medicines) that account forexpenditure of less than one-third of one percent of GDP, oneof the lowest in the world. This is contrasted with the highestexpenditure made in the US where full 2.5% of GDP goestoward pharmaceutical purchases (around $300B). Theaverage per capita yearly expenditure in Pakistan is around$5.50 or Rs. 350/yr. However, these numbers could not beextrapolated as generalized because of the great dichotomyin the distribution of per capita GDP, high cost of treatment ofdiseases in the poverty-ridden populations, irrationalprescribing trends, etc., As a result, even though the totalexpenditure on drugs is not large, the affordability of safe and

effective medications remains one of the most seriousproblems facing the country.

In addition to other Complementary and Alternative Medicinessystems such as Ayurvedic and homeopathic, the Unanisystem has been accepted and integrated into the nationalhealth system. Pakistan is the only country in the eastern

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Mediterranean region where formal Unani teaching institutionsare recognized. There has been significant movement at thepolicy level in terms of CAM regulation. There are 45000traditional healers, of who about three-quarters are practicingin rural areas. The presence of these practitioners in ruralareas may be regarded as a source of health care delivery forthe rural majority of Pakistan. Approximately 52600 registeredUnani Medicnial practitioners are practicing in both the publicand private sector in urban and rural areas. About 360 tibbdispensaries and clinics provide free medication to the publicunder the control of the health departments of provincialgovernments.

In Pakistan, over half the population (66%) lives in the ruralpart of the country. Poverty, compounded by illiteracy, lowstatus of women, and inadequate water and sanitationfacilities, has had a deep impact on health indicators. Limitedknowledge of health and disease, cultural and householdremedies, perceptions of a health service and provider andsocial barriers, and the cost related to the provision of aneffective health service have been the major barriers.

The health care system in Pakistan has two main divisions: thepublic domain and the private domain. The public sector,which is regulated and recognized but mainly composed of anallopathic system of health care, is severely under-utilized dueto certain weaknesses including insufficient focus onprevention and promotion of health, excessive centralizationof management, political interference, lack of openness, weakhuman resource development, lack of integration and lack ofa public health policy. In the private sector, there are very fewaccredited outlets and hospitals, but many unregulatedhospitals, medical general practitioners, homeopaths,hakeems, traditional/spiritual healers, Unani (Grecoarab)healers, herbalists, bonesetters and quacks.

In Pakistan herbal medicines are fall in following overlappingcategories, which established by Drug Regulatory Authorities:

1. Non-Essential Drugs, all those molecules that do notfall under the WHO Essential Drugs List. A price

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control mechanism for these drugs will be based oncompetition wherein a substantial price reductionwill be required upon expiry of patents on newmolecular entity.

2. Medicines that do not require a prescription (it isimportant to know that being it does not mean amedicine is safe or its price uncontrolled)

3. Medicines which are best taken out of drugscategory registration such as food supplements,vitamins and other such products. Unnecessarilyclassifying non-drugs as drugs allows drugcompanies to promote them through professionalmeans.

Causes of Market Shrinkage

a. Current Status of Unani Tibb

i) Rivalry Factor: The relationship betweenthe conventional allopathic physician andthe Unani Tibb practitioners is of rivalryand animosity, just as happens in any otherpart of the world. Orthodox medicine hasnever been in favor of traditional

medicines, these practices are denouncedvigorously by restricting their access,labeling them as antiscientific andimposing penalties on their practice. Someunderstandable factor for this rejectionincludes lack of education, training,regulation and the evidence base of Unanipractitioners.

Strong, sophisticated, research based andpin-pointed (Segmented) marketing efforts

of national and multinationalpharmaceutical firms slowly pushes themarket of herbal medicines into decliningstage and gradually decreasing the totalneed level for Herbal Products

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ii) Role of herbal medicinemanufacturers: The part of herbalmedicine manufacture in revitalization ofunani tibb is very limited. From pastseveral years major herbal medicinesmanufacturers are not doing enough toimprove the status ofUnani Tibb, andUnani Tibb Practitioners in order todevelop them as a strategic businesspartner, as various Multinational andNational Pharmaceuticals firms doing withallopathic physicians, they supports closelyassociated profession to support theirbusiness.

Herbal medicine manufactures, due to thenature of business, usage of brand buildingtools are restricted then other business.They cannot openly publicize pure unanipharmacopoeia medicines, the channelthey are forced to use to expand ofmaintain the size of market is only and onlythe practitioners that is the true and mostimportant significance of herbalpractitioners.

iii) Role of Quacks: Due to unavailability ofproper check and balance mechanism,Quacks are openly playing with lives ofinnocent peoples in suburban and ruralareas of Pakistan, and giving unani tibbbpractitioners a bad name and loweringrespect for them and their medicines in thecommunity.

iv) Spurious medicines : A massive influx ofspurious / unregistered medicines in themarket with lustful advertisement isanother major reason which is giving badname to Unani Tibb and its medicines. These drugs are also building the wrong(Only specialized in sex oriented

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medicines) perception about Unani Tibbamongst the mind of consumers.

v) Herbal medicines not always safe : There is a general belief amongst theconsumers that the herbal medicines arealways safe, because they are natural butevidence suggests some medicines likekushtas, syrups, majons can create healthhazards and developed side effects,reactions if not properly produced orprescribed.

vi) Counterfeit Medicines:These medicinesare produced with out following safety andpharmacopeias standard and thendeliberately and fraudulently mislabeledwith respect to identity and/or source. Itmay contain wrong active ingredients,wrong amounts of the ingredients or noactive ingredients at all. These medicinescan cause death or disability as result. There are gaps in the herbal medicinestrade cycle from the manufacturer towholesalers, distributors and retailers andthen to end users, which give the way toslip in or to proliferate, counterfeitmedicines. Particularly, in the case ofherbal medicines, counterfeit medicinesemerging as a dilemma, which isthreatening the leading manufacturersreputation.

a. Marketing Practices

i) Selling Tactics: As we discussed earliermajor players of market are stronglyemphasizing on selling tactics, notpursuing brand-building and consumeroriented measures even though they aredragging their products into FMCGsproducts category. Its quite clear that, in

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the selling tactics they are using, everything for intermediaries and nothing forend users (Customers). Herbal medicinesmanufactures are utilizing their resourcesand to some extend succeeded to convertsome of their very herbal medicines intomore like FMCGs (Fast moving consumergoods), the best examples of these starproducts are ROOH AFZA, CINKARA,GAISTOFIL, CARMNIA, and JOHARJOSHANDA, i.e. Medicines that can be takenwith out prescription for primary healthcare needs.

ii) Competition Avoiding Tactics: As wementioned earlier, there is no idlecompetition exists between majormanufactures, consumer are leastconcerned with brand or name ofmanufacturers, their buying decision istotally based on availability of product nomatter who produced it. Due to that factor,manufacturers are free to enhance prices,which will lead to a chain reaction; one-after-other, vice versa prices will hardlyvary manufacturer-to-manufacturer. Itmakes the fact proven here that; the mosteffective price control mechanism is indeeda healthy competition.

Our study suggest that, whenever, due tothe increase in cost of doing business,manufacturer force to rise price, they losssubstantial part of their consumer-ship.

b. Lack of Intuitive Research and developmentactivities

i) Backward packaging style: From pastseveral years Major manufacturers ofherbal products have not undertaken anysignificant intuitive product development

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process. Lack of market developmentoriented research is shows from the SKUs(Stock Keeping Units) outlook and stylethat remains more or less as it was 20-30years back.

ii) Lack of Market Development orientedresearch: There is a lack of MarketDevelopment oriented research, bothmarket players strongly focusing onsegments like Lower Middles class andnonprofessionals class, with deepemphasis on intermediaries basedmarketing planning.

iii) No Technological Improvement: One ofthe most dramatic force shaping peoplelives is technology that released wonders.Every new technology is a force forcreative destruction for others; thevibrant movement of westernpharmaceutical industry hurt the herbalmedicine industry, like many old industriesherbal medicine manufacturer striving veryhard to survive. They are not involving anysignificant technology based innovation inorder to improve their portfolio of brands.

c. Role of Regulatory bodies

i) Ineffective enforcement of relevantlegislation: Presently, the drug regulationfinds a place in the Concurrent LegislativeList Section 20 given in the further

schedule of the 1973 Constitution ofIslamic Republic of Pakistan. In exercise ofpowers conferred upon the FederalGovernment by the aforesaid provision ofConstitution, and Act entitled Drugs Act,1976 was promulgated to regulate theimport, export, manufacture, storage,

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distribution and sale of drugs. The missionof the regulatory bodies, should be Toprotect and promote public health byensuring equitable access to safe,efficacious, quality and affordablemedicines and other selected healthproducts and their rational use throughimplementation of available regulation andeffective enforcement of relevantlegislation.

ii) Lesser coordination betweenregulator and manufacturers:Although, the government of Pakistan hasin place a number of organizations andinitiatives aimed at strengthening andcoordinating various aspects of theAlternative Medicines Sector,supplemented by non-government andprivate sector initiatives. However,stronger coordination of the sector at thenational level under a strategic plan isimperative, which will produce offshootsinto research and development.

iii) Lesser role of ministry of health. Muchhas been said and even some has beendone to take herbal medicines under thefull fledge control of Ministry of Health,unfortunately, this has not materializedbecause of multitude of factors, mostlypolitical but also scientific such as themeans of definitive testing of theseproducts. When the health of majority ofPakistanis is at stake, it is unconscionable

not to take herbal medicines into fullcontrol.

There are so many gray and lacunas areasin the regulations which are availed by thefake herbal medicines producers, sellers

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and Quacks to escape from the grip of lawunder the thirst of money.

The way forward

a. Manufactures responsibilities

i) There is a definite need to design trainingand capacity-building and supportiveprograms for the unani practitioners whoneed such continuing education, hencebringing them into the mainstream and

elevating their status in society, thatprograms should be supported by theGovernment and sponsored by the herbalmanufacturers.

ii) Effective and systematic marketing andpublic awareness campaigns are needed tosupport the base i.e. unani tibb, its systemof healing.

iii) The medicines are being used have not

been thoroughly researched, and by andlarge there is only evidence from 100-50years old documents, therefore, morefinancial allocation towards the researchand product improvement anddevelopment required.

b. AuthoritiesResponsibilities

i) The state regulatory authorities have crucial

role to play in this scenario, in terms ofrecognition of unani tibb, financing andappreciating training and research in the filed.

ii) A positive interaction between all cadres ofhealth providers, academicians, policy

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makers, and researchers has to beharnessed to work for a common goal.

iii) The inclusion of some introductory modulesof unani tibb into the medical curriculum ofallopathic medical schools should beconsidered.

iv) Close monitoring of the medicinesdistribution channels are needed andvarious law enforcing agencies can play apivotal role. Stricter penalties and lawsmust impose on those who foundconvicted. All the data about sale orpurchase of the medicines are properlymonitored and medicine supply chain mustbe transparent.

v) Consumer education is also importantand the public should know basic way ofidentifying the quarks, spurious andcounterfeit medicines. The Ministry ofHealth should start the campaigns,continuing education, and refreshercourses for those who are involved in themedicine trade with the help of herbalmedicines manufactures.

Conclusion

The unani tibb and its pharmacopeias medicines is animportant source of health care, business activities, it is theresponsibility of herbal medicines manufacturing firms tomake some extra efforts, by involving more finance intechnological research and development expenditure and

participating and implementing standards and codes ofpractice for the industry, in order to avoid the decline stagepharmacopeias medicines market.

It is also the responsibility of government to provide relaxationto herbal medicine manufacturers so that they can standfirmly on their feet in order to gain strength and promote their

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potentials to compete generally in local market andparticularly in international market in the wake of WTO regimeto bring more foreign exchange.

The revitalization of herbal pharmacopeias medicines is purelyin the interest of poor patients who need cheep and their veryown source of treatment. Effective utilization of thesemedicines will enhance the health of nation; unani tibb hasthe potential to provide more employment opportunities.

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BIBLIOGRAPHY (SECONDARY DATA)

Philip Kotler. MarketingManagement: 11th ed.,Prentice-Hall of India2002

IN THE SUPREME COURTOF PAKISTAN (AppellateJurisdiction) CriminalMisc. Application No._______/2006In Criminal Misc.Application No. 66 of2006 Written reply onbehalf of SecretaryHealth, Ministry of Health,Islamabad.

A Framework for DrugRegulatory AuthoritySubmitted toMinistry of HealthGovernment of PakistanBy Sarfaraz K. Niazi,Ph.D. Consultant to theMinistry of Health,Government of Pakistan

Review Article Pakistan J.Med. Res. Vol. 43 No.4,2004Inamul Haq. Safety ofmedicinal plants

Babar T. Shaikh andJuanita Hatcher :Complementary andAlternative Medicine inPakistan:Prospects and LimitationsHealth Systems Divisionand Community HealthSciences ResearchDevelopment Office,Department ofCommunity HealthSciences, Aga KhanUniversity, Karachi,Pakistan

Financial Reports of threemajor herbal medicinesmanufacturer

Marketing ResearchReports

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ACKNOWLEDGMENT (PRIMARY SOURCES)

1. Mr. Naseeumuddin of Naseem Store, Nazimabad

Karachi.

2. Mr. Haseeb Taqi of Taqi & Sons, Jodia Bazar, Karachi.

3. Mr. Hakeem Shakeel Ahmed, Liaqabatabad, Karachi.

4. Mr. Jameel Akhtar (Managers Sales Planning, Hamdard)

5. Mr. Asif Ali Zaidi (Manager Accounts, Hamdard)

6. Mr. Noman Rizvi (Coordinator Matab Sale, Qarshi)

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The assignments perform by the group members:

Primary Data Collection through interview and questioners, by

Mr. Asad Mehmood and Mr. Furqanuddin, Secondary data

collected by Mr. Qazi Noman Imtiaz. Report formatting,

compiling, and proof reading is done by Mr. Asad Mehmood.

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