As the going gets tough for the pharmaceutical industry across the world, domestic drug companies have had to take some tough decisions — including “killing” a product, for instance — as they “re-imagine” their roles and strategies.
Earlier, companies grew and made money by just being there; now they need to be good at it and that requires them to make some hard choices including, said GV Prasad, Co-Chairman and CEO of Dr Reddy’s Laboratories, speaking at the concluding event of the Indian Pharmaceutical Forum. Dr Reddy’s has decided to focus on five areas including India, the US, Russia, API (active pharmaceutical ingredients) and bio-similar products, he said, ‘de-emphasising’ everything else.
Prasad was speaking at the CEO roundtable that saw equally candid statements from other participating members including Lupin MD Nilesh Gupta, Cipla MD and CEO Umang Vohra and Cadila Healthcare Chairman Pankaj Patel.
Echoing the observation, Lupin’s Gupta said that 15 years ago companies just needed to be there and they grew. Presently, Lupin is looking to focus on the US and India, and not overly focus on bio-similars, he added. Even as they build on differentiated and specialty products, decisions are being made on research spends and manufacturing, he said.
Cipla’s Vohra said the company has continued to invest in the branded markets in India and South Africa, for instance. And though it was a late entrant in the US, he said, it has decided to sell through hospitals and be therapy-agonistic.
Strategic exits
Narrating Zydus Cadila’s experience, Patel said his company is also growing its bio-similars portfolio in emerging markets. Pointing out that the company exited areas that may not have performed to its expectation, he said the last such decision taken was its exit from Japan.
While the industry top brass said that they were optimistic that efforts and investments of the past were bearing fruit, they were quick to admit compliance issues and “fear of the unknown” literally kept them up at night.
Pointing to the disruption in the sector, Dr Reddy’s Prasad said his worries were on how an Amazon, Google or Apple could “take our business from under our feet.”
Personalisation, digital products, wearables etc are changing healthcare. So, years from now, “ as an industry will we continue to be relevant,” he said, responding to a query from panel moderator Gautam Kumra, Managing Partner, McKinsey & Company (India).
Causes for concern
While Lupin’s Gupta said that exciting or worrisome developments involving the fate of a product or a clinical trial could keep him up at night, Cipla’s Vohra answered that question with “compliance, for sure.” Pointing to quality compliance issues that are top-of-mind for drug companies, he said the pace of the industry was the other concern. “We all come super charged to do things, but is that good enough?” he asked.
Focussed on quality issues, the IPF was organised by the Indian Pharmaceutical Alliance in collaboration with the Central Drugs Standard Control Organisation and McKinsey.