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Rural India is suddenly the focus of many drug companies, both Indian and multinational. After Novartis embarked on a plan to dig deeper into Tier-3 and Tier-4 towns through a hitherto unconventional model called Arogya Parivar, Sanofi-Aventis too devised a similar approach to establish its roots in those new regions, otherwise untapped by big companies.

Not to be left behind, Dr Reddy’s also invested in a specialised field force with an eye on the smaller towns. Mankind and Cipla were already among those having a significant presence in those towns and get close to the doctors for prescriptions. There are, in addition to these big names, scores of smaller companies that have localised marketing network and are seeing the bulk of their topline coming from prescriptions generated through doctors in small cities.

Big consultants like McKinsey have suggested many a time that improvement in health infrastructure will be a key driver for rural growth as India marches towards becoming a $40 billion pharmaceutical industry by 2015, half of which will come from domestic market growth. It does not take a global consultant to tell you that —- a look at the changing dynamics of rural India is indication enough.

Marginal farmers may have gone to the brink of survival courtesy the corruption of government officials and politicians, but a surge in demand in almost every category tells a brighter story. Here is a first-hand account from a taluka level town, 800 kms away from the bustling Mumbai.

A popular two-wheeler model with a price tag of Rs 43,000 had a wait list of three months, a few others had at least two weeks of notice time, a local four-day mela organised by a large voluntary club had hundreds of people jostling for an entry pass. Almost every stall in that big fest, ranging from a Maruti Suzuki counter displaying A-Star to electronic devices to farm equipments, had hordes of crowd making serious enquiries. Food stalls were packed for hours before I could get my dose of junk food.

The whole place looked as if it were part of a booming pre-Lehman collapse economy and there was no semblance of despair, quite in contrast to the gloom that I had seen in Mumbai. A special dance competition had talented young boys and girls participating, and they could well qualify for the dozens of television shows.

From lay-offs and recessionary economy to a pocket of high spending, growth-oriented economy, it was a welcome change.

I was tempted to look at the local primary health centre run by the state government to gauge why our Indian drug industry wants to make a renewed pitch for rural markets. Against the usual filth in Mumbai’s state-run hospitals, the corridors were clean, though patient queues were longer. The system seemed like working faster than our city clinics and hospitals as many patients were called in a span of a few minutes.

Local government-employed doctors told me that there is a lot of stress on meeting targets in programmes like the cataract eye operations. Local agencies are mobilised to convince households to participate in health awareness campaigns organised by state government bodies. Asha help workers were said to be doing a brilliant job.
I checked on the status of private practice of doctors.

At every street corner, there was a doctor’s board. May be a MBBS or a BHMS or just a BDS, but there were at least a few patients waiting for their turns. The fees ranged from Rs 20 to Rs 70, but a few doctors, sensitive to the constraints of the poor, had a flexible rate. Prescriptions were mostly for brands from local companies. I could see bigger pharma brands in abundance, but largely local companies seemed to be a preference.

That’s why big companies in the pack are looking at rural markets. If the local doctors can be convinced of the pricing of medicines, there could be a whole new market waiting to be tapped. Novartis has done an outstanding job in understanding that cities and villages of India are two distinct markets, not just from the angle of therapeutic focus, but also from the pricing point of view.

I came back feeling very optimistic that our drug companies have got their strategies right. On my way back, as I stared at the brand new four-way national highway being constructed as part of the golden quadrilateral programme, my confidence of a resurgent economy, this time propelled by the solid rural spending kept swelling.

Pillman is an executive closely linked to the global pharma industry