Selling medicines to institutional and tender buyers: how a pharma manufacturer prepares

A state medical supplies corporation closes a tender in ten days, and your plant has never bid. State corporations, government hospitals and large trust hospitals buy medicines through tenders and rate contracts, each with its own documents and calendar. A manufacturer prepares in three ways. It keeps a file of company papers current, so no bid is lost to a missing certificate. It keeps its own calendar of the buyers that purchase its products. And it decides in advance which tenders are worth bidding, because some cost more to win than they return.

Who buys by tender, and how each one behaves

A state medical supplies corporation issues a tender for a list of medicines, evaluates the bids, and awards rate contracts for a period. Hospitals and district warehouses then place orders against those contracts. Your price is fixed for the period, but the quantities are not promised.

A large government or public sector hospital may run its own tender, or buy locally for items the central contract does not cover. Railway, defence and corporate hospitals keep approved vendor lists and invite quotes from them. A trust hospital or a large private chain runs a purchase committee and asks for a quote with documents attached, which looks like a tender and is judged like one.

What they share is the document check before the price is opened. Each tender sets out its own list, and lists differ between buyers and change from one tender to the next. Rules on who may bid and which permissions apply differ by state and body and change, so check with your own adviser or the regulator. Then read every tender's own checklist line by line.

The standing file: a register you keep current

Keep one folder, paper and scanned, and one register that says what is in it. The register matters more than the folder.

The "valid until" column is the one that saves bids. Sort the register by it and look at the top five rows before every tender.

The performance row is the one manufacturers neglect, and our post on a standing file for government hospital tenders explains how to collect it at handover. For a medicine plant, the pharma-specific row is the product list. A bid for a group of ten items can fail if one is missing from your permissions, so tick every item against the document before you start.

A buyer calendar you keep yourself

Nobody sends you a reminder that a corporation's tender is due. List the ten institutional buyers that purchased your molecules in the last cycle. For each, note when the previous tender opened and closed, how long its rate contract ran, and the name of the purchase or stores officer you dealt with. Put a reminder in the calendar well before the next one is expected. Then watch that buyer's own website and the procurement portals it uses.

GeM is one of those portals for many government buyers; our guide on how to sell on the GeM portal covers registration and listing. Note the rate-contract period against each buyer too, since your raw material cost must hold for that long.

Which bids to skip

A tender is worth bidding when four things hold. You make most of the items in the group yourself, rather than buying them in. You can hold your price for the contract period even if your raw material costs move. You can carry that buyer's payment cycle without borrowing at a rate that eats the margin. And you can supply call-off orders at short notice from stock.

Skip it when the price you would need is below your cost. Winning a rate contract at a loss does not get you noticed; it gets you a year of loss-making supplies. Skip it, too, when one product in the group is outside your permissions and the tender does not allow part bids.

For example: a dry syrup maker in Waluj

Imagine, as an invented example, a maker of syrups and dry syrups in Waluj, near Aurangabad, that supplies private distributors and wants institutional business. A neighbouring state's corporation opens a tender with ten days to the deadline. The chartered accountant needs a week for the turnover certificate. The group includes a drops product the plant's permission does not yet cover. The declaration needs a notary, and the owner is travelling. The bid goes in late and is rejected without being opened.

The owner now keeps the register above. One person in the office owns it. The turnover certificate is requested as soon as the accounts close, and the declaration is a vetted draft waiting for a signature. Before any bid, someone ticks each item in the group against the permission. At the next tender the plant bids only for the groups it can cover in full, and the papers go in with days to spare. The first of those bids still loses on price, and the register costs a part-time clerk about ₹15,000 a month. Whether the plant wins is now decided on price and evaluation, and no longer lost on paper.

Selling between tenders

Institutional sales are not only bids. The pharmacy head, the stores officer and the purchase manager decide what goes on the next list and which supplier is called when a contracted one fails to deliver. A clear corporate profile, with your plant, your permissions and your institutional record on two pages, gives them something to forward.

Institutional buyers are one route among several, and the pharmaceutical manufacturing page puts them beside private brand owners.

Start the file with whatever expires first

Sort your current documents by expiry date and put the register together this afternoon, starting at the top of that list. If you want help building the register, the buyer list and the first bids through RFP and tender management, tell us what you need.