What is difference between Pharma Franchise and Pharma Distribution?

In One line we can differentiate Pharma Franchise and Pharma Distribution - A pharma distributor only redistributes products of a pharma company in an allocated area to retailers, Nursing homes, hospitals, Pharmacies whereas a Franchise apart from redistribution also promotes ethically or otherwise the said products to the medical fraternity for prescriptions or OTC promotion.

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In detail Pharma Distribution and Pharma Franchise Difference:

In pharmaceutical distribution, Pharma company appoints own medical representatives and sell products through own sales team. Pharma company bill to distributor at price to stockist rate and pharmaceutical distributor has a particular margin like 8%, 10%, 12% etc, and distribute products to pharmaceutical retailers (pharmacies and chemists) by receiving orders from pharma company’s sales team. Pharmaceutical distributor must have wholesale drug license.

In pharma distribution, pharma company don't provide any exclusive rights and monopoly rights. Company assign a particular area to distribute products. Some time distributor from other area can supply material in their areas.

In Pharma Franchise, Pharma company don't provide medical representatives or sales team. Pharma Franchise distributor either appoint its own sales team or do marketing by own. Pharma company provides products at net rates, not price to stockist. Pharma Franchisee has to market and promote product and get order from market.

Net rate is the rate which is provided by pharma company without adding any promotional and sales expenses i.e. manufacturing cost plus profit margin. Difference between net rates and price to stockist is the margin which is got by pharma franchise distributor from which he/she will manage marketing expenses, sales team expenses and salary, own profit etc.

Pharma Franchise doesn’t always need to be a wholesale drug license. They can appoint a distributor having wholesale drug license and start working as pharma franchise.

In Pharma Franchise, Company provides monopoly and exclusive rights so no other distributor can supply product in their area as its franchise hard work that are generating sale in that territory.

Other than differences, pharmaceutical distribution and pharma franchise has certain things in common like both are related to distribution of drugs. In pharma distribution, only supply of medicines and collection of payments is most important work whereas in pharma franchise, marketing and promotion of products is most important work along with supply of medicines and payment collection.

Hope above information is helpful to you...
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