Insulin Marketing Plan

Abstract

Insulin is a life saving product which has been a constant support for diabetics worldwide. Over the past decade, the market of Insulin has grown by 7%. In India, insulin had a market value of around $250 million in the year 2012 (www.biospectrumasia.com) . The market has been dominated by multinationals with the largest market share enjoyed by Novo Nordisk, followed by Eli Lilly and Sanofi. Indian companies are also present in the market but with a lower significance. In India, the

NPPA (National Pharmaceutical Pricing Authority) responsible for setting two price ceilings for imported and indigenously made Insulin. For multinationals, the price ceilings are higher which gives the opportunity to sell at a higher price which is an

It leads to more shortages as prices remain low which causes the demand to rise.

2. The production reduces as firms lose their incentive to supply more. This leads to under allocation of resources. Therefore the shortage of the product increases and makes it worse for the consumers.

3. It also leads to a rise of informal market where people, who are not able to purchase the product due to an existing shortage and have the ability to pay for it, buy the product at a price above the price ceiling. This leads to unaccounted economic activity which can be damaging to an economy.

4. It also affects the distribution of the product among the potential customers. Distribution no longer depends on price. A seller can sell on a first come first serve basis or he can sell it to their favored customers. He can also issue coupons to customers who will be able to purchase that product for a limited time period in a fixed

If the change in quantity demanded is greater the change in price, the good is price elastic in nature. If the change in quantity demanded is lesser than the change in price, the good is price inelastic in nature. It is measured by the formula:- PED= (%of change in good X demanded)/ (%of change in price of good X)

Price Elastic products include goods which have a large number of subsidies in the market, giving the customer more power to choose any firm based on the different prices.

Price Inelastic products are goods which are unique in nature and are generally produced by very few firms. Customers don’t have much power and are compelled to buy in the give price. This is relevant for this research as insulins are not commonly produced and each brand of insulin has some special functions. Since consumers of insulin cannot chose any brand they like but have to rely on the prescription by the doctor, the insulin product becomes price inelastic in nature.