Media Coverage

The mergers and acquisitions in the pharmaceutical industry are proving to be a nightmare for medical representatives. Suddenly their best-selling brands are 'gone' and sometimes the entire company 'disappears'. To end the uncertainty out came a charter of demands last month, even as almost 20,000 of them from all over the country laid a siege to the office of the Organisation of Pharmaceutical Producers in India (OPPI) at Mumbai.

A strong dose: 20,000 medical representatives protesting in Mumbai

Besides proper handling of the mergers and acquisitions the Federation of Medical Representatives Association of India (FMRAI) demanded job security, jobs under the principal employers after merger, no cut-back on facilities or perks, and an end to black marketing of products by the manufacturers. The mergers in the industry gathered momentum in the early nineties, with the most prominent one being that of Hindustan Ciba-Geigy and Sandoz. Novartis was the result of this union. Others such as Gufic sold its main brand Mox, which contributed to more than 50 per cent of the company's turnover, to Ranbaxy. To Ranbaxy's credit it employed the representatives of Gufic, who had few other products to promote.

But employees of Max Pharma were rendered jobless after Rhone-Poulenc took it over. Of course, they were offered the voluntary retirement scheme (VRS), but more often than not it was thrust on them. "Resistance led to harassment," said one of the employees. According to Wockhardt chairman Habil Khorakiwala, after mergers people at the managerial level have lost jobs because "there is no need for two vice-presidents for marketing once companies merge". "Medical representatives have rarely lost jobs by mergers because it is a personalised selling market and companies stand to lose if they give up these people," he said.

Medical representatives, however, alleged that companies preferred to recruit daily-wage workers, casual workers, contractual workers, lady communicators and trainee executives to do sales because the Sales Promotion Employees Act, 1975, does not apply to them. Sashi Menon, regional sales manager of Astra IDL, denied this and said his company only recruited people as medical representatives and not as casual or contractual workers. But the other companies that THE WEEK contacted refused to comment.

In fact, companies are increasingly handing over sales to distribution firms, which hire people to promote the product among doctors and chemists. These people become jobless once the principal company's contract with the distributor ends. The FMRAI has demanded that the workers should be employed directly by the companies.

But what has incensed the representatives most is the thriving "parallel market", which they say makes it difficult for them to achieve targets. It is alleged that in the parallel market the companies, evading excise duty, sell at a lower price to private distributors who passes on the reduction to the retailer. As a result, the customer gets the drug at less than the listed price.

The FMRAI wrote about this to the Drug Controller of India, which in turn queried the OPPI. The producers put the onus on the drug sellers, the manufacturers of spurious drugs and the field officers "who may be promoting products made by the dealers". The field officers vehemently denied the "ridiculous proposition". "The originating point has to be the manufacturer," said a Calcutta-based field officer. "Why should I sell a fake product when I cannot meet my targets?" he asked.
But the field officers' aggression has had no impact on the producers.

B.S. Ramesh, deputy general secretary of OPPI, dismisses the FMRAI's demands saying, "The resolution containing the demands has been given to individual producers, and we have no locus standi in the matter." "Most of the issues raised by the FMRAI have no substance," said Habil Khorakiwala. Criticising the "work norms" of the field officers, he said managers visiting an area had to inform the field officer a week ahead and even tell the union about it. "A manager who came unannounced was beaten up by the union people," he alleged. "Such norms cannot be sustained in this era of competition." And as the competition hots up medical representatives are bound to have their hands full, demands and all

For More Information Contact:

FEDERATION OF MEDICAL & SALES REPRESENTATIVES’ ASSOCIATIONS OF INDIA
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Tel: +91-33-4242862
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