India’s pharmaceutical and healthcare sectors are globally recognised for their scale, innovation and affordability. The country enjoys a distinct advantage with a low cost of manufacturing—30 to 35 percent lower than in the US and Europe—alongside cost-efficient R&D and a vast pool of skilled labour. However, for all these strengths, a latent weakness continues to weaken the effectiveness of pharma supply chains. Most companies are still working on unverified credit terms, relying on oral commitments and oral agreements. In an industry that has a direct impact on public health, such financial obscuration can have alarming effects. Enforcing trade credit score checks as a routine procedure is no longer an option but an absolute requirement for long-term stability.
Hidden Money Traps
Pharma supply chains are often stretched across multiple layers from manufacturers to stockists to retailers. Most players extend credit informally based on past experience or goodwill. A medical distributor in Mumbai, for example, may offer lakhs worth of medicines to a local pharmacy without verifying its current financial health. If the retailer delays or defaults on payment, the distributor not only loses working capital but may also struggle to restock from manufacturers. Such delay cascades through the chain and ends up depriving patients of timely access to basic drugs. Incorporating trade credit checks allows companies to catch red flags early and prevent such monetary pitfalls.
Risk Without Records
In contrast to consumer finance, where digital trails and credit scores guide decisions, the B2B pharmaceutical space remains largely undocumented. There is no central system to track payment behavior or assess the financial reliability of trade partners. This lack of visibility leads to a conservative and exclusionary credit culture. New and promising retailers may be denied opportunities, while legacy partners can misuse the absence of scrutiny. Indian pharmaceutical companies are expecting revenue growth of nine to eleven percent in FY25, and this growth cannot be realized if credit practices continue to function in the dark. Trade credit score checks help level the playing field by offering a fair and consistent framework for risk evaluation.
Strain on Innovation
Lack of reliable financial data discourages pharma businesses from exploring new regions or scaling operations. Even well-resourced manufacturers hesitate to enter untapped markets where distributor credibility is uncertain. This limits access to essential medicines in remote and underserved areas. With verified credit insights, businesses can take confident and informed steps toward expansion. More inclusive and transparent trade credit systems would help in building partnerships that are sustainable and growth-oriented. Innovation, reach, and service delivery improve when financial trust is backed by real data rather than assumptions.
Smarter Business Culture
Adopting trade credit score checks signals a powerful shift toward a more responsible and forward-thinking business environment. When companies across the pharmaceutical and healthcare supply chain know their credit behavior is being continuously monitored, payment discipline naturally improves. This leads to quicker inventory cycles, stronger cash flow and deeper trust between supply chain partners. Modern credit assessment platforms enhance this transformation by providing unbiased credit scores tailored for the pharmaceutical industry, real-time alerts on shifting payment patterns, and customized insights aligned with each business’s needs.
These platforms integrate effortlessly with enterprise systems, ensuring smooth operations and greater consistency. They also support regulatory compliance by issuing timely alerts on critical matters such as drug license expiry. Clear visual dashboards offer an instant overview of financial health, while robust data security protects sensitive information. With expert support available at all times, businesses are better equipped to make informed decisions. As India strengthens its global position in pharma, this culture of financial transparency and operational intelligence becomes essential for equitable and sustainable growth.
(The author, Mannuri Vamshi Krishna, is the founder & CEO of MedScore.)
