The presentation gives a brief idea of how a pharmaceutical industry carries out industrial buying and what are the specific requirements as per industrial goods classifications

1. Pharmaceutical Industry
Presented by:
Avinash Geerjamundo

2. Introduction:
• The pharmaceutical industry develops, produces, and markets
drugs or pharmaceuticals licensed for use as medications.
Pharmaceutical companies are allowed to deal in generic
and/or brand medications and medical devices. They are
subject to a variety of laws and regulations regarding the
patenting, testing and ensuring safety and efficacy and
marketing of drugs. The word pharmaceutical comes from the
Greek word Pharmakeia. The modern transliteration of
Pharmakeia is Pharmacia.

3. Global Pharmaceutical Industry
• The earliest drugstores date to the Middle Ages.
• The first known drugstore was opened by Arabian pharmacists
in Baghdad in 754,and many more soon began operating
throughout the medieval Islamic world and eventually
medieval Europe.
• By the 19th century, many of the drugstores in Europe and
North America had eventually developed into larger
pharmaceutical companies.

4. Global Pharmaceutical industry
• Most of today's major pharmaceutical companies were
founded in the late 19th and early 20th centuries. Key
discoveries of the 1920s and 1930s, such as insulin and
penicillin, became mass-manufactured and distributed.
Switzerland, Germany and Italy had particularly strong
industries, with the UK, US, Belgium and the Netherlands
following suit.
• in the USA, Pfizer was founded in 1849, by two German
immigrants, initially as a fine chemicals business. They
expanded rapidly during the American civil war as
demand for painkillers and antiseptics rocketed

5. Top10 International pharmaceutical companies
Name of Company Country of Origin Total revenues million ($)
1. Pfzier USA 67809
2 Novartis Switzerland 53324
3 MERCK and Co USA 45987
4 Bayer Germany 44200
5 Glaxo and SmithKline United Kingdom 42813
6 Johnson and Johnson USA 37020
7 Sanofi France 35645
8 Hoffman-La Roche France/Switzerland 33547
9 Astra Zeneca United Kingdom 26475
10 Abbot Laboratories USA 22476

6. Indian pharmaceutical Industry:
• Bengal Chemicals & Pharmaceuticals Limited (BCPL), established
in 1901, is a Public Sector Undertaking (PSU) of the Government of
India and is India's first pharmaceutical company
• The number of purely Indian pharma companies is fairly low. Indian
pharma industry is mainly operated as well as controlled by
dominant foreign companies having subsidiaries in India due to
availability of cheap labour in India at lowest cost.
• In 2002, over 20,000 registered drug manufacturers in India sold $9
billion worth of formulations and bulk drugs. 85% of these
formulations were sold in India while over 60% of the bulk drugs
were exported, mostly to the United States and Russia.
• Most of the players in the market are small-to-medium enterprises;
250 of the largest companies control 70% of the Indian market.
• Thanks to the 1970 Patent Act, multinationals represent only 35% of
the market, down from 70% thirty years ago.

7. Top 10 Indian Pharmaceutical companies
Name of Company Revenues
millions(USD) 2012
1 Abbott India Ltd 1348.51
2 Ranbaxy 1327.56
3 Dr Reddy’s Laboratories 1178
4 Lupin Ltd 929.84
5 Aurobindo Pharma 865.19
6 Dabur 700.3
7 Sun Pharmaceutical 673.99
8 Cadila Healthcare 629.45
9 Jubila lifesciences 561.03
10 Piramal healthcare 480.26

8. Overview of a pharmaceutical
company (Astra Zeneca)
• Currently ranked 9th worldwide and having got a
total revenue of $26475 million.
• Astra AB was founded in 1913 in Södertälje,
Sweden by 400 doctors and apothecaries. n 1993
the British chemicals company ICI demerged its
pharmaceuticals businesses and its agrochemicals
and specialties businesses, to form Zeneca Group
plc,and in 1999 Astra and Zeneca Group merged
to form AstraZeneca plc.

9. Core competencies
• AstraZeneca develops, manufactures and sells pharmaceutical
and biotechnology products to treat disorders in the
gastrointestinal, cardiac and vascular, neurological and
psychiatric, infection, respiratory, pathological inflammation
and oncology areas.
• AstraZeneca's pipeline, and 'patent cliff', was the subject of
much speculation leading to pipeline-boosting collaboration
and acquisition activities.

10. Products provided by
• – Anaesthetics
• Carbocaine (mepivacaine)
• Citanest (prilocaine)
• Diprivan (propofol)
• EMLA (lidocaine/prilocaine)
• Marcaine and Sensorcaine (bupivacaine)
• Naropin (ropivacaine)
• Xylocaine (lidocaine)
• Xyloproct (lidocaine/hydrocortisone)

11. Other Core competencies
• The company's most successful medication is
esomeprazole. (Nexium)Two years before the
omeprazole patent expired AstraZeneca patented S-
omeprazole in pure form, pointing that since some
people metabolise R-omeprazole slowly, pure S-
omeprazole treatment would give higher dose
efficiency and less interindividual variation.

12. Company’s strategy
• Their business strategy centres on enhancing our
R&D, expanding footprint in emerging markets,
boosting efforts to source innovation from outside
AstraZeneca and increasingly working in partnerships
that broaden the base for success in improving
healthcare.
• Everyone in AstraZeneca, wherever they are located,
is required to work to global standards of ethical
sales and marketing practice.

13. • This is especially important as our business in
emerging markets, such as China and Russia,
alongside our continued efforts in established
markets, including the US and Japan continues
to grow.

14. Industrial Goods
Definition:
Industrial goods are products that companies purchase to make other
products, which they then sell. Some are used directly in the
production of the products for resale, and some are used indirectly.
Unlike consumer goods, industrial goods are classified on the basis
of their use rather than customer buying habits. These goods are
divided into five subcategories: installations, accessory equipment,
raw materials, fabricated parts and materials, and industrial supplies.
Industrial goods also carry designations related to their durability.
Durable industrial goods that cost large sums of money are referred
to as capital items. Nondurable industrial goods that are used up
within a year are called expense items.

15. Classification:
• Installations :
• Installations are major capital items that are typically
used directly in the production of goods. Some
installations, such as conveyor systems, robotics
equipment, and machine tools, are designed and built
for specialized situations.
• Examples of installations in pharmaceutical industry:
• Manual, semi-automatic, and automatic packaging
machinery is commonly available. Product types
include:

16. Classification
• Accumulators gather goods or items for processing.
• Batching machines prepare material for processing or packaging.
• Bagging machines place product in a bag, sack.
• Banding machines and sleeving machines secure products together
with a band or sleeve.
• Box making machines build boxes from cardboard.
• Bundling machines form goods into piles for subsequent banding
or wrapping.
• Capping machines place, snap, or screw caps onto containers.
• Cartoning machines create cartons or boxes from cardboard.
• Closing machines are designed to close packages with a tying wire,
narrow metal strap or tape around the neck of the bag; by placing a
lid on a can or drum; and closing a box or other type of package.

17. Classification:
• Cleaning machines sanitize containers or packaging devices.
• Collating machines package or assemble product in proper
numerical or logical order.
• Combining machines form containers into a single line for
subsequent filling operations. Counting machines count products
before, during or after a process.
• Decorating machines decorate packages.
• Packaging machines build packages such as cartons or boxes.
• Filling machines and packer machines fill bags, bottles, and cans
with a predetermined volume of product.
• Forming machines are used to form containers or packages.
• Inspection machines review products for blemishes, leaks,
consistency or types.

18. Example of capital items

19. Suppliers of Capital items:
• Recoo Technology Co. Limited (mainland
china)
• Excel Plants & Equipment Pvt Ltd, Pune
• Red rack manufacturers United kingdom
• Sulzer Metco Inc. USA
• Surmech Engineers Private Limited, Indore

20. Methods involved in procurement:
• Industrial purchase: Usually straight rebuy is done
from a list of approved existing limited vendors as
pharmaceutical items are capital items and are high
involvement usually one time buying
• Bidding
• Leasing
• Tendering

21. Accessory Equipment Goods
• Accessory Equipment Goods that fall into the subcategory of
accessory equipment are capital items that are less expensive
and have shorter lives than installations. Examples include
hand tools, computers, desk calculators, and forklifts. While
some types of accessory equipment, such as hand tools, are
involved directly in the production process, most are only
indirectly involved.
• Examples of Accessory equipment Goods:

22. Classification
• Trolleys
Trolleys for load handling inside the plant
Trolleys for load handling outside the plant
• Trays/baskets/cassettes to house product
Trays, baskets, plastic bags to house product
• Integrated systems for load full handling:
Lifts, sensors ,air-conditioners, generators , shelves,
sealing tapes , rubber closures, vials, syringes,
burettes , pipettes ,test reagents, air extractor, air
purifier (HEPA filters), wire gauze, caps,

23. List of suppliers:
• Valiant Pharma Equipments, Thane
• R Modi Group, Ahmedabad
• Semrad international
• C. S. Aerotherm Private Limited

24. Method of procurement:
• Industrial purchase: Usually straight rebuy is
done from a list of approved existing limited
vendors as pharmaceutical items are capital
items and are high involvement usually one
time buying
• Bidding: usually at lowest price quotation
• Leasing
• Tendering

25. Example of accessory items:

26. Raw materials
• Raw Materials Raw materials are products
that are purchased in their raw state for the
purpose of processing them into consumer or
industrial goods. Examples are iron ore, crude
oil, diamonds, copper, timber, wheat, and
leather.
• Examples of Raw materials involved in
pharmaceutical industry:

27. Examples of raw materials:
• AMMONIUM BROMIDE
• AMMONIUM MOLBDATE
• ASCORBIC ACID - VIT C
• BEESWAX
• BENZOUL PEROXIDE
• BENZYL ALCOHOL FFC
• BENZYL BENZOATE
• BENZYL SALICYLATE
• BORIC ACID
• CALCIUM CARBONATE - PPTD

29. List of Suppliers:
• S. Zhaveri Pharmakem Pvt. Ltd. – India
• Indus Pharmaceuticals – India
• Stellar Pharmatech Pvt. Ltd.

30. Method of Procurement:
• Raw materials are supplied in the following forms
• Technical
• Industrial
• Pharma Grade
• Purchase is carried out by bulk buying and straight rebuy
method. In case of Pharma grade products, modified rebuy is
carried out with taking into consideration specific parameters
such as percentage purity, limits of quality controletc..
• Other methods of procurement include bidding, tendering and
sub contracting.

31. Fabricated Parts and Materials
• Fabricated parts are items that are purchased to be
placed in the final product without further
processing. Fabricated materials, on the other
hand, require additional processing before being
placed in the end product. Many industries,
including the auto industry, rely heavily on
fabricated parts. Automakers use such fabricated
parts as batteries, sun roofs, windshields, and
spark plugs. They also use several fabricated
materials, including steel and upholstery fabric

32. Examples of fabricated materials:
• Cryogenic Mill
• Series Mixer
• Precision Sheet Metal Fabrication
• Metal Laser Cutting Parts
• Induction Heating Machine

34. List of suppliers
• Higao Tech. Co. Ltd.
• China (National) Abrasives I & E Corp
• Hebei Africa Machinery Co., Ltd.

35. Method of Procurement:
• Industrial Buying: Modified Rebuy with
specifications involved
• Tendering
• Bidding

36. Industrial Supplies:
• Industrial Supplies Industrial supplies are
frequently purchased expense items. They
contribute indirectly to the production of final
products or to the administration of the
production process. Supplies include computer
paper, light bulbs, lubrication oil, cleaning
supplies, and office supplies.

37. Examples of Industrial supplies:
• Lightning facilities uv tube lights
• Detergents
• Antiseptics
• Gloves
• Office supplies
• Aprons/masks
• Goggles

38. List of suppliers
• Pharma med
• Barrs pharmaceutical Industries Cc
• Schering (pty) Ltd