Propaganda cum distribution (PCD) in the pharmaceutical industry is a profitable business and all involved parties wish to maximize their profit. As a manufacturer, you want to earn by marketing and promoting your products with the help of an able franchise. As a franchise, you want to earn more by collaborating with the doctors and chemists. This circle of common interest relies on the performance of each involved party including the manufacturer, the distributor, the retailer, etc.
A manufacturer can choose to give you the monopoly over its products or can choose many franchisees to take up the PCD work. While almost all parties make money, the question here is to make the most out of the opportunity. And, that is only possible if you have the pharma franchise monopoly rights.
The Benefits of Monopoly
As a monopoly, you would get the exclusive rights of marketing and promoting a pharmaceutical companies' drugs in a particular area and this can help you in a number of ways.
- Increasing Profit: If you have no competitors in a particular area, you only have to network with doctors and chemists to prescribe and sell your medicines (respectively). This does not mean that other companies will not be trying to sell their products in your area. But, it means that the profit derived from selling a particular manufacturer's medicine will solely be yours.
- Eliminating Competition: Monopoly rights guarantee no competition from a particular manufacturer. This is helpful because you as a pharma franchise monopoly have the sole right to distribute medicine in that area and therefore, there is no confusion in terms of distribution of profits.
- Networking: Many a times, sales representatives contact a doctor for a particular medicine but because of lack of monopoly design, the doctor is already in agreement with some other PCD's representative. This means that the time and effort incurred by a representative is a waste because no revenue is generated from this visit.
- Keeping Business Running: If a manufacturer is involved with many PCD pharma companies in a particular area, then the profit sharing and reduced margin might disinterest the involved companies and they might stop promoting this manufacturer's medicines. This will cause a blow to the manufacturer's business because it will lose on some good partners.
It is worth noting that not all manufacturers are pro monopoly and they have reasons for not indulging in this type of a business interaction. Therefore, the right strategy more or less can also depend on the area in which you function. If the territory is vast, then it would make more sense to involve multiple franchisees or to partner with a PCD pharma company that has the manpower to cater to a big area. But, most of the time pharma companies are small start-ups with not a lot of people because the effort required is quite negligible and the companies want to retain maximum profit. But, if monopoly can be acquired, then there is no better choice.