PCD Franchise Model of Production

The PCD model in the pharmaceutical industry operates on a monopoly basis, with not more than one vendor in one particular district. The vendor’s have their own medical representatives visiting the doctors. Medicines can be of two types- Ethical Medicines and Generic Medicines, ethical medicines are usually life saving drugs these are regulated strictly by the government other in terms of quality standards and their prices, these cannot be sold at prices other than Government approved ones.

Ethical drugs are also produced as per predetermined quotas. On the other hand, generic drugs are bulk produced hence quality of these are not as high as ethical drugs, prices of these are not administered by Government but determined by the market forces usually these are cheaper than ethical drugs. Logo’s of these drugs may not be very uniform and usually these come in glossy packing to attract consumers.  Big private hospitals usually always use ethical drugs and qualified doctors writing the prescription on their letter pads only prescribe these.

However in India still there are ample doctors who don’t use letter pads for writing prescriptions they would write on blank sheets these would often carry prescriptions of generic drugs, quality of which is not always very high. Law exists against prescribing drugs of low quality; hence the certified doctors using proper letter pads would usually always prescribe ethical drugs so that they are free of any risk.  In our country people want can afford only cheap medicines here people themselves may ask the doctors or chemists to give the cheaper generic drugs than ethical drugs.

There are many companies which besides being involved in PCD (Propaganda cum Distribution) Franchise in India also do manufacturing for the big pharmaceutical companies this arrangement is known as third party production.

Third party production model has really taken off in the last decade this change is due to the Government policy of promoting business through tax rebates where third party producers have blossomed. This model usually lowers input cost as the supply chain is not as long and hence ensures economy for the end user.  So in the near future this market is expected to grow further. Big corporate have understood this and they themselves are into this market. Anybody interested in knowing more about third party and PCD producers can get in touch with the ‘Drug Today’ group. 

Some critics have raised questions regarding the quality standards of drugs produced through third party model. Propaganda cum Distribution is a model of distributorship where big pharmaceutical companies give distributorship rights. PCD products are manufactured by third parties which are quantity oriented and not quality oriented. The major reason being the evolution of high tech manufacturing units in the excise free zone, catering to the needs of the PCD companies.

This has led to blooming of PCD companies which were quite dormant during the period of 1992-2002.The question of ethics and quality is laid to rest as even the biggies are outsourcing many of their requirements from the same manufacturers.

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