No, you should NOT directly compare franchise rates with generic (unbranded) drug rates.

It is for the following reasons :

1. Different Business Models
   Generic drugs are sold without brand value, often by small-scale manufacturers with minimal marketing, packaging, or distribution costs.

On the other hand Franchise (branded) drugs come with the backing of a recognized brand, quality assurance, promotional material, marketing support, and established trust in the medical community.

2. Brand Value Commands Higher Margins as :
   Doctors often prescribe based on brand trust.

Customers are more willing to pay for reputed brands due to perceived quality and safety.

The MRP (Maximum Retail Price) of branded drugs is generally higher, allowing better profit margins even if the franchise rate (your purchase cost) is higher than for generics.

3. Support & Infrastructure
   Pharma franchise companies provide:

Monopoly rights (in some cases)

Marketing and promotional inputs (visual aids, samples, literature)

Product training

Regular stock availability

Customer support

This infrastructure justifies a higher rate than a basic generic product.

Instead a Franchisee should Compare Rates with Other Franchise Brands in the Same Segment

Pick 2–3 similar reputed companies and compare their rates for the same molecule.

Check the below mentioned elements –

a)Net Rate (your purchase cost)

b)MRP

c)Scheme or Bonus Offers

d)Profit Margin

e)Quality (packaging, certification, GMP, etc.)

f)Brand popularity among doctors

Plus Focus on Profit Margins, Not Just Purchase Cost.
Margin = MRP – Purchase Cost
A slightly higher purchase cost might still yield better profits if the MRP is higher or the brand is more sellable.

Understand Local Demand because
Some branded products, even if priced higher, are easier to sell because of existing demand or doctor preference.

As a new entrepreneur, you are not just buying medicines , you’re buying into a brand, system, and reputation.

Focus on the following points :

1)Sellability of the brand

2)Support system from the company

3)Profitability rather than lowest cost

Avoid the mistake of going for cheapest generics thinking you’ll make more it may end up being harder to sell, less trusted, and lower profit.
Regards,
JAKSTAR PHARMA