Dr. Ajit Dangi, Ex-President OPPI, Chairman of the Board, Fulford India Ltd.
Mr. K.N.Chandrasekharan, Consultant & Ex-CEO, Khandelwal Labs
Mr. Narayan Swami, Senior Director (Finanace), Sanofi
Mr. Krishnan Hariram, Ex-MD, Galderma India Ltd.
Mr. Safia Rizve, MD, UCB India Ltd.
Mr. Srinivasan, Director, Alkem Labs
The panelists debilitated on the broad topic of how the Pharma industry and Pharmaceutical domain would probably evolve by the year 2020. The panel discussion began with an introduction from Dr. Ajit Dangi who shared his perspectives on Indian Pharma Industry. He gave us valuable insights into various statistics of the Indian Pharma industy, wherein, among other statistics, he also stated that, in 2011, India accounted for $ 23 billion in domestic and export sales which contributed to 2 % of global sales ( $ 900 bn ). The entire panel discussion revolved around the idea of the Indian Pharmaceutical industry moving up the value chain by “moving from cost arbitrage to intellectual arbitrage”, which would help India attain world leadership in the Pharmacy sector in future. The discussion laid focus on the 7 strategic drivers needed to attain world leadership. The strategic drivers discussed are as follows:-
- Ecosystem for Innovation: An ecosystem that encourages and supports innovation in the field of pharmacy should be created and nurtured. For eg. Novartis has spent $ 500 mn for a facility in China named Novartis institute of tropical diseases (NITS) for research on diseases like malaria and dengue.
- Consistent & Predictable government policies: At present there is a lack of consistent government policy. FDI in Pharma sector is undergoing changes. There is 100 % FDI in Greenfield projects. In case of Brownfield investments in the Pharma sector, FDI would be allowed through the FIPB approval route for a period of upto six months. During this period, necessary enabling regulations would be put in place by the Competition Commission of India (CCI) for effective oversight on mergers and acquisitions to ensure that there is a balance between public health concerns and attracting FDI in the pharma sector.
- Harmonization of Regulatory Practises: Regulatory norms should be developed by central drug authorities.
- Building and nurturing brands: At present in India , there are 70,000 “ me too ” brands, which cannibalise the market and hence the competition becomes tough. In order to sustain this competition, companies should start following the “DIVA” strategy which stands for Differentiation, Innovation & Value Addition.
- Inorganic growth through mergers and Acquisitions: M & A’s help company to get the necessary innovations. For Eg: Johnson & Johnson became the no. 1 healthcare company in the world as it is a conglomerate of almost 100 companies. The M & A’s helped J & J in market capitalisation internationally.
- Healthcare policies: Healthcare policies should emphasize on easy availability, affordability & access to medicines. Indian government spends only 1% of its GDP on healthcare, whereas other developed countries spend 15- 16 % of their GDP on healthcare. With the view of the large population, India should spend more on prevention rather than cure. i.e. more should be spent on sanitation, vaccination and immunization.
- Talent acquisition & development: The Indian intellectual minds should be retained in India & patent protection should be provided for their innovations.
Mr. Narayan Swami, Senior director , Finance , Sanofi Aventis mentioned that precision engineered products like Insulin pen definitely need patent protection as it is one of its kind. Mr. K. Hariram , Retd. Managing director, Golderma India ltd dicussed about India’s competitive advantage over other nations with context to its 3 factors of Democracy, Diversity and demography to be a leader in Pharmaceutical business. Ms. Sofia Rizvi, M.D, UCB India Ltd mentioned a very important point on R & D at marketing level. She also said that the marketing of a particular brand is also an innovation.
Questions were raised on various aspects relating to the seven factors of moving up the value chain. The panelists’ discussion came to a conclusion that out of 7 strategic drivers, lack of consistent government policies and healthcare policies are at present hindering the growth of the Indian Pharmaceutical business. The improvement in the same will definitely add to the Indian Pharmaceutical industry’s success.
Mr. Ajit Dangi closed the discussion by giving a triple bottom line for upcoming CEO’s to focus on financial, environmental & social aspects with context to pharmaceutical industry. Overall, the entire session proved to be a fruitful one that led to value addition for the students.
By Namrata Subhedar, PGDM – Pharma (2012-14)