Free drug distribution policy of government of India may lead to downsizing in pharmaceutical sector

The government is planning to promote generic medicines and low-cost brands in its drive to make medicines more accessible to the all those who seek treatment in public hospitals from October, 2012. It is being made mandatory for all doctors to prescribe generic drugs and salt names and not brands. Rajasthan has already had a scheme for the free distribution of generic medications. Under the ‘Chief Minister`s Free Medicine Scheme’ launched on Oct 2, 2011. Around 414 most-used drugs and surgical instruments are at present available at 14,964 distribution centers in government health centers, dispensaries and hospitals across the state. Pharmaceutical companies will likely rethink their HR strategies carefully to take account of this development, and any similar copycat moves across other geographies. The whole chain of sales and marketing that includes Distributor, Stockist, Retailer, Regional Managers, Divisional Managers, Area Managers, Senior Medical Representative Medical Representatives, etc. will see the tough time. All this may lead to downsizing in sales force as proportionately the team which works in sales and marketing is larger in pharmaceutical industry. Downsizing is a commonly used euphemism which refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees. So, the question is do Pharmaceutical companies in India are ready and equipped to make sure that the downsizing process will reflects well on their company? For this these companies will require to follow some fundamental principles, which will reduce the dangers of downsizing by avoiding the common pitfalls of a poorly planned downsizing. Downsizing is neither a ‘Mantra’ to deal with the changing scenario in pharmaceutical industry due to implementation of free drug distribution in India nor a route to ‘Nirvana’. Cautious and strategic moves will help the pharmaceutical companies to handle the situation efficiently and effectively without losing the reputation of their company.