As we all know that Corona Virus outbreak has stirred all world and India is no exception. Today we in India are standing at the brink of Stage 3 (Community Transmission) of Corona Virus which is very deadly in terms of Health as well as economy of whole country. But today we will discuss what impacts it will have on PCD Pharma Industry of which we all are important part of.

Effect on Supplies from Manufacturer Side

As most of PCD Pharma companies don’t have their own manufacturing plants, they get their supplies from other third party manufacturers. As China is primary source of Pharma Raw Material, there is already significant shortage of API’s which have already resulted in spike of prices of almost all raw materials.

But this is just short term effect, that too when Virus didn’t even spread in India. But as Number of cases are rising in India everyday, Manufacturing Facilities will have to be in lockdown for several days or months which will result in instantaneous cut off of finished products to PCD Companies.

As PCD Companies mostly rely on single manufacturer for procurement of specific drug, this will result in shortages of more than 50% molecules in their product range which will hamper your prescriptions.

Effect on Logistics (Couriers & Transports)

As most of the customers of PCD Pharma Companies are located all over India, Logistics play an important role in movement and supply of goods in these remote regions.

But as Govt. of India is locking down several states and as of today trains are also barred from running we expect a great impact on functioning of couriers and transports.

Once these get effected parties will not get their goods on time which again results in shortage of medicines all over.

Effect on Cash Flow

Due to high level of uncertainty in availability and prices of raw material, third party & contract manufacturers have started shifting from 60 days credit facility to Cash Basis which have resulted in significant depletion of working capital of PCD Pharma Companies.

As demand is usually random in these companies, we suspect that due to low level of working capital and insufficient credit facility there is going to be problem in storing huge inventories for future which will result in shortage of goods frequently.

Effect on Sales Volume

When uncertainty and prices of goods in market is high there is no reason to expect that customers will buy in large quantities. So sales will automatically go down as future prospects doesn’t look good in India.

Also many products are in DPCO and prices of these products are on all time high which have resulted in almost negligible margins in selling these products. This will create absence of interest to sell these products at all levels and will dramatically reduce the total turnover.


So we conclude that in coming days all PCD Pharma companies are going to get heavily impacted in terms of sales and profit of margins in a negative way. Those companies which have large inventories and good working capital will be able to survive this epidemic with some bruises but the companies which are running on very small scale and totally rely on manufacturers credit cycle will be washed away and will be force to start from zero in near future when everything is normal again.

What you should do as customer of PCD Pharma Company?

If you have franchise of company which is less than 3 years old or which have less than 150-200 products you are more susceptible to shortage of medicines and prescription bouncing. So either you find one or two more stable companies as alternatives in case of shortage or you can develop some parallel sources of income like generic marketing and dispensing or hospital supply etc.

I am Mohit Kumar (Managing Director, Trumac Healthcare). We are 13 years old company with more than 1300 products in our folio.