A PCD Pharma franchise can provide a great opportunity for entrepreneurs, medical reps, distributors and those within the pharma industry.
Before getting started, it is important to know your market, assess the product range, check out the company, understand licensing and create a realistic sales plan.
We will walk you through how to start a PCD pharma franchise in India and what decisions you need to make.
What is a PCD Pharma Company?
PCD stands for Propaganda Cum Distribution. A PCD Pharma Franchise is when a pharma company allows a business partner to promote and distribute their products.
Depending on the partnership, they may gain exclusive rights to sell certain products in a certain area, with the correct promotional support.
Each company will have different terms and conditions. It is important to confirm the terms in writing, whether it is exclusive rights, monopoly, minimum order or promotional requirements.
1. Know the Business Model
Before investing, it is important to understand how the business works.
Typically, the pharma company will supply or organise the supply of pharmaceutical products. The PCD Partner will buy them on agreed terms. They will work to build business in an agreed area. The products will be distributed via the correct licensed channels and there will be repeat sales based on market demand.
Ensure you know what you will be doing, what you will be buying and what you can sell.
2. Market Research
Your first step should be to carry out some market research.
Identify the city, district or region you are looking to trade in. Know the pharma supply chain and what products are available to your potential customers.
How many pharmacies and stockists are there that you could reach? Do you already have any contacts within the pharma industry? What product ranges are relevant to your market? Are there any competitors already in your area? Will you be trading on your own or employing a sales team? How much working capital do you have to invest in stock and running costs?
Speak to experienced pharma distributors and research the market before investing in large amounts of stock.
3. Choosing the Correct PCD Pharma Company
One of the most important factors to consider when starting your PCD Pharma Franchise is choosing the correct business partner.
Before choosing a company, consider:
Are they genuine? Check they are genuine and have the correct licences and registrations.
What products do they have? Which brands, formulations, dosage forms and pack sizes are available?
What documents do they have? Request any relevant approvals, manufacturing information and documentation.
What are the prices, minimum orders, payment terms and taxes?
How much stock do they have? How quickly will they be able to send stock? What if there is damage or out of date stock?
What support do they have? Exactly what promotional material and support can they provide?
Don’t just go for a company that offers high margins and lots of products.
4. Assess Product Range
Ensure the products are suitable for your business and market.
Consider:
Brand name, formulation, dosage form, strength, pack size, approval, storage requirements, shelf life, trade price, cost, availability, market requirements.
Start with a few products.
5. Monopoly / Exclusivity
Some pharma companies offer exclusivity to certain areas.
Before agreeing to this, ensure:
What area are they offering exclusivity for? What products can you sell? How long will this last for? What is the minimum order or performance requirement? Is it exclusive? What are the renewal and termination terms? What happens if either party breach the agreement?
Always get this in writing. Don’t take someone’s word for it.
6. Licensing
If you are going to hold, sell or distribute drugs wholesale then you need to know what drug licensing requirements you have.
Depending on your business model, you may need to consider:
What type of business structure you will have, what premises and storage you will have, if you need to register for GST, if you are eligible for a competent person and what documents you need.
Drugs are regulated under the Drugs and Cosmetics Act and Rules in India. Depending on what you are doing, what products you have and what premises you have you may require a licence. Speak to the relevant State Drug Licensing Authority for the correct requirements.
Find official information here CDSCO.
7. Work Out How Much You Want to Invest
Before getting started, work out how much you want to invest.
You may want to invest in:
Initial stock, premises and storage costs, licensing and registration costs, transport costs, sales and marketing costs, salary costs (if applicable), credit for customers, accounting costs.
Don’t just work out your profit based on MRP – purchase price.
Work out what you are actually selling them for, what discount you are giving, what taxes, freight, running costs, credit and expiry risk you have.
8. Sales Strategy
Having products to sell is only half the battle. You need to have a strategy in place.
Know who to target and what areas.
Create a list of potential pharmacies, distributors and other eligible buyers. Have a system in place to regularly follow up. Keep track of enquiries, quotes, orders, payments and repeat sales.
Ensure you have accurate and authorised information on the products. Promotional activities should be in line with regulations. For example, the Government of India have Uniform Code for Pharmaceutical Marketing Practices 2024.
View the official guidance here UCPMP 2024.
9. Repeat Sales
To grow your business in the long term you will need repeat sales.
Keep track of:
What products each partner are buying, what stock you have, what needs reordering, what is outstanding, what feedback you are getting from customers, what products aren’t selling well and what improvements you can make to your product range.
Use real data to help you know what stock to order.
10. Common Mistakes
Avoid the following when starting your PCD Pharma Franchise:
Don’t choose a company without checking. Always ensure you have checked the documents, products and terms.
Don’t buy too much stock. Start with a realistic plan.
Don’t ignore licensing. Ensure you know what you need.
Don’t take someone’s word for exclusivity. Ensure you have it in writing.
Don’t ignore working capital. Ensure you have enough to reorder stock and cover running costs.
Don’t make unrealistic claims in your promotions. Ensure your products have accurate information.
FAQs
Is a PCD Pharma Franchise right for a beginner?
If you understand the market, have a suitable business plan and meet the requirements for licensing and terms then it may be.
How much do I need to invest?
There isn’t a set amount. This will depend on how much stock you are buying, where you are trading, what premises you have, how many staff you have, what products you are buying and your business model.
Can existing pharma distributors apply?
Yes. Existing distributors and stockists can look into PCD options to compliment their current product range.
Can I have exclusivity in my district?
This depends on the company and what they have available. Ensure you have this in writing.
How do I choose a PCD Pharma Company?
Ensure they are genuine, have the correct documents, suitable product range, good pricing, stock availability, distribution terms and support.
PCD Opportunities with Logimed Pharma
Choosing the right product range and business partner will help you to build a sustainable distribution business.
Logimed Pharma are happy to speak to potential PCD Partners, distributors and stockists.
Request our product catalogue so you can see the range available. We can also talk through what territory and terms you would have.
Logimed Pharma Product Catalogue
PCD Pharma Franchise Opportunities
Logimed Pharma – Logical Solution for Better Health.