Nepal – New Emerging Pharma Market
Nepal is fast emerging market. Total market size today stands around 5 billion.
There are around 350 companies. Market has around 4000 brands, which are either local brands, Indian brands, or brands which are imported and sold. This market is growing fast. With more professional approach it can give rich dividend to Indian companies. Moreover, their operation in Nepal can give gateway to other SARC countries like Bangladesh, Bhutan or even China due to proximity, low cost of manufacturing and distribution logistics. It is heartening to know, during the recent visit to Nepal at the invitation of No. 1 Pharma Company NPL, that many Nepali companies are eager to start their operation in India or have joint ventures in Nepal.
Hindustan Lever, Dabur have done a good job in Nepal and got immense benefits from such venture. There are many reasons to look at these options:
1 Market Size
According to Nepali Authority like DDA or Drug Manufacturing
Association, market is around Rs. 600 crores with Nepali companies dominating with 30% and others are dominated by Indian/MNC companies.
10-15% is institution business . It is a prescription-based market often influenced by Retailers.
There are around 37 Nepalese companies. Royal Drug Ltd. was the first
Nepali company to start their operation in 1972. There is No Bulk Drug
Units and raw materials are imported from India/China.
As per data available the top 15 companies based on sales are given below :
Rank Company
1 Nepal Pharma
2 Lomus Pharma
3 Aristo
4 Deurali Janata
5 Knoll Pharma
Origin Value
(in crore)
Nepal
Nepal
Indian
Nepal
MNC
6 Dabur
7 Lupin
Indian
Indian
8 National Health Care Nepal
9 Hoechst MNC
13.2
11.8
11.4
10.7
9.6
9.1
8.7
8.6
8.1
10
11
Alkem
Ranbaxy
12 Cadila Pharma
14
15
E Merck
Novartis
Indian
Indian
Indian
13 Cadila Health Care Indian
MNC
MNC
7.8
7.4
6.3
6.3
6.0
5.6
M.S.
(%)
3.85
3.47
3.31
3.08
2.78
2.65
2.50
2.50
2.35
2.27
2.14
1.84
1.83
1.75
1.64
Source : Market Data

As per industry source, the actual sales are very high. NPL for example has a turnover of 17 crore and is No. 1 company in Nepal.
The leading segments are :
Segment
Antiobiotic
Cough & Cold
Vitamins
Musculoskeletal
Anti Inflammatory
Dermatological
Antacid/Ulcerant
Cardiovascular
Amoebicides
Anthelmintics
Sex Hormones
Anti-anaemics
Others
Percentage
24.7
7.1
6.6
6.6
6.0
4.9
4.6
3.9
2.4
2.5
30.7
Others
30%
Cough& Cold
7%
Amoebicides/Anthe lmintics
4%
Musculoskeletal
Anti Inflm.
7%
Antacid/Ulcerant
5%
Vitamins
3%
Cardiovascular
5%
Dermatological
6%
Sex Hormones
2%
Antibiotic
24%
Antacid/Ulcerant
Vitamins
Antianaemics
Cardiovascular
Dermatological
Sex Hormones
Antibiotic
Musculoskeletal Anti
Inflm.
Amoebicides/Anthelmi ntics
Cough& Cold
Others

2
Thus like India, Antibiotic segment is No. 1 segment followed by cough and cold. Vitamins and anti-inflammatory are 3 rd & 4 th big segment. However,
Nepal in Dermatological segment is much larger which is not so when compared to India. Similarly, Amoebicidal/Anthelmintic segments too are important segment, which is contrary to Indian market potential. These data can be useful in penetration of Nepal market.
The leading brands are
Rank Brand
1 Rabipur
2 Polybion
3 Megapen
4 Digene
5 Althrocin
6 Keflor
7 Vovran
8 Chyawanprash
Aval
9 Sporidex
10 Decold
Company
Hoechst
Merck
Aristo
Knoll
Alembic
Ranbaxy
Novartis
Dabur
Ranbaxy
-
Data : 2003
The above table indicated that there is good scope for third and fourth generation antibiotic and newer antiulcerant. Company can get good reception and penetration provided company goes with the newer molecules.
Therefore, market is a virgin market for a highly professional skilled company provided they have determination to emerge a leader.
Less Degree of Competition :
Competition with professional skills are missing. Due to lack of unskilled field force a determined company with good strategy and skilled field force can make a “Difference“ in Nepalese market. There is need to adopt more marketing tools to become more aggressive in the market. This should generate good productivity.

3 Low cost of Manpower :
Manpower cost is low in Nepal. Therefore, training and proper input utilization should help the company to:

Shorten the period of break even point

Achieve and improve ROI in shorter duration

Generate higher productivity
This can be added advantage specially if a company plan to have joint venture or set up its own factory. Hindustan Lever Ltd. and Dabur have got tremendous advantage.
4 Availability of low cost raw materials and natural herbal ingredients .
China being nearer and abundance of natural resources offer a great opportunity for Indian Company to manufacture the product and export to
China, India, Bangladesh etc. Low cost of manufacturing can give a marketing edge.
5 Low investment on Area coverage :
Though doctors are spread over all the important cities of Nepal, however, a field force of 30-50 should be sufficient to cover entire Nepal. Thus, 3-5 managers with a team of 6-7 medical representatives under him should be sufficient to get maximum returns.
How to get into Nepal
In case company does not want to set up joint venture/company in Nepal, they can get themselves registered by filling up from through stockist and pay $ 1500 as inspection charge. Factory should be WHO GMP certified. Per product Rs. 2000/- is paid once company is registered. Other documents required are finished products, specification like size, colour, total weight, description regarding packing and labelling, method of analysis, analytical report of company with endorsement from
Ita Lab/Shree Ram Lab or RDRL, Nepal of one batch, pharmacopeal standards, manufacturing licence, price list with expiry date etc. This will help them to get product registered.
Thus, Nepal offers a good opportunity to Indian companies. This will make their presence in SARC countries and also help in penetrating China. Nepal government encourages such activities with facilities. HLL/Dabur have taken lead. Many more companies are looking at it. Similarly, many Nepalese companies too are thinking of starting their operation in India. Coming months may be more exciting in these respects.

Has published article in Economic Times, Pharma Pulse, Journal of
Marketing, BMA Review, Medical Marketing Media, USA etc.