In the current times, the topic of demonetization has been gaining a lot of momentum. For those who do not know, demonetization is the process in which the currency is no longer considered as a legal tender by the law of that country. So, it is like a country banning its own currency; it could be done for a number of reasons, such as- to introduce a new currency with the same value, or to fight against black money and corruption.
A lot is being said about the benefits and demerits of the present demonetization act in India. Through this piece of writing, we will try to understand the effect of demonetization on the Pharma industry, if any.
Influence of demonetization in the pharma sector of India
It is very well known that cash is used quite a lot in the Pharma business, particularly as bribe. Big Pharma companies make use of cash transactions in order to get a hold of the market. Initially, it was difficult for the small Pharma companies and the entrepreneurs to stand a chance against the big players. But, after the demonetization act has come into effect, the big companies are struggling to maintain the flow of cash for bribing their clients. As a result of it, the entrepreneurs or new players have found a new ground for competition. Demonetization has certainly provided a lot of advantage to the new Pharma companies.
Another way in which demonetization is going to affect Pharma sector is related to the rates of medicines. Since most of the transactions now are going to take place via online and banks, therefore the amount of profit made cannot be kept hidden by the Pharma companies and stores. So, it will certainly discourage the Pharma stores to charge more from the customers. In addition, demonetization will also bring in the habit of maintaining legal invoices as well as bills.
We all know that how Pharma companies and distributors try to keep the doctors happy by offering benefits on regular basis, usually in the form of gifts, tours, etc. With the inception of demonetization, this habit of influencing the doctors for generating prescription will no longer is going to flourish. So, it will certainly provide the smaller companies to compete in the market in a better way.
Better regulation of the Pharma market has also become possible with the effect of demonetization. As more fluidity will take place in banking transactions, the government will be able to have a better regulation over the pharmaceutical market. This will give rise to a less corrupted Pharma market. At the same time, with the implementation of new rules and regulations, the prices of expensive medicines will also slash down, which in turn will benefit the common man.
So, there are tons of benefits associated with the demonetization of the Indian Pharma sector. With the passage of time, more smoothness will be brought into it. Overall, it will be advantageous for the customers as well as for the new Pharma companies.
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