RxQuotient Jan09 Final

8/14/2019 RxQuotient Jan09 Final

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Knowledge Driven Communications

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Pharma Perception Research

RxQuotient

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Brand India has in the past few years gained significant

recognition globally, due to pre-dominant contributions from

two driving sectors of the Indian economy- Information

Technology and Pharmaceuticals. While Pharmas muchtouted cousin IT, has catapulted its synergies to surge ahead,

the Indian Pharmaceutical industry, seems to be in a state of

perpetual quandary, ever since the turn of the new

millennium.

Circa 2005 was expected to change the rules of the Pharma

business. For survival in the patent era post-2005, New Drug

Discovery and Exports were prescribed as the panacea - in

contrast to the 1970s patent regulation that gave Indian

Pharma the fillip to have global operations as also ability to

manufacture medicines at low cost.

To understand what the industry observers- analysts and

journalists- perceive of Indian Pharma and its future outlook,

RxQuotient - the Healthcare Research Initiative of Adfactors

PR conducted a perception study in December 2006

constituting Mumbai journalists. Following it-up is the current

study in November 2008 comprising Mumbai based analysts as

well as journalists.

RxQuotient observes a positive perception change vis--vis

2006 doubt about Indian Pharmas ability to discover a new

drug is replaced with confidence in 2008 - confidence that is

the outcome of number of molecules in the clinical stage and

out-licensing deals struck by Indian companies. Indian

companies capability to take the product to the market on

their own is an obstacle some feel which, if overcome can

boost the image of the country and industry. Earlier, Indian

pharma companies brought Brand India on the global stage

based on cost advantage and quality products: Can Indian

Pharma repeat the same feat in New Drug Discovery Research?


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RxQuotient is not presenting a statistical view of the two key

stakeholders perceptions based on the responses to the

structured questionnaire. What it does present, are theexpectations and understanding of Indian Pharma by analysts

and journalists- two stakeholders, key audience for the Indian

Pharma industry.


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is a positive development for the industry and opened up

opportunities for collaboration with multinational players.

It established Indias reputation for scientific (chemistry)

capability. Yet the CRAMS business is being seen as a short

term advantage; the Eastern European or Far Eastern

companies might soon catch up on the cost advantage.

Competitive advantage for the Indian companies would

rest on the capability to add value.

RENEWED INTEREST IN THE DOMESTIC MARKETThe Indian domestic market growing at around 15% is

under the radar again. Companies like Mankind, whichhave gained strength in the domestic market, are being

watched.

THE BIG SURPRISEThat the countrys largest pharma company would be the

first one to sell out was a big surprise to many. Earlier,

people assumed that Company below a certain size would

find the going tough and eventually sell out, but withRanbaxy gone, people believe size does not matter.


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There are thousands of pharmaceutical firms in India but only

a few gain immediate recall, regard and are tracked by the

analysts and journalists with no prompts being solicited.

RxQuotient identifies the stars in the Indian Pharma Galaxy companies that the observers are watching- constantly!

DR. REDDY SIf there is one company that seems to have been instrumental

in shaping the learning curve of Indian Pharma, it is Dr.

Reddys. Be it making a mark in the generics market of

regulated countries, New Drug Discovery Research, Out-

licensing deals, unique financing model for research, among a

host of other initiatives, Dr. Reddys seems to have led the

pack. The industry observers admire the company and its

mentor Dr. Anji Reddy.

CIPLAThis company proves the adage, actions speak louder thanwords. Analysts complain that the management meets and

talks only once a year- at the AGM. Yet they have their eyes

set on this company. Reason- the massive expansion that the

company has undertaken, gives an impression that the

company is poised for enormous growth. The non-confronting,

partnership model of the company is perceived advantageous.

DISHMANSilently executing its CRAMS business and without making

much noise, Dishman has manages to draw everybodys

attention.


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An analyst succinctly captured Indian Pharmas state of

innovative research thus: t he work of Indian pharma in

innovati ve research is l ike learning to ride a bicycle- fall ing is

part of t he learning process . The recent incident of two

multinationals returning the molecules of an Indian company

is perceived as a setback- not a downturn.

While the news of out-licensing deals takes the stock price

soaring, any hint of negative development plunges stocks.

Industry observers attribute two reasons to this phenomenon-

a) The markets dont understand research

b) Companies build very high expectations

To tackle the first issue, observers feel, pharma companies

hived-off their R&D units to attract serious investors (apart

from cleaning the balance sheet). To deal with the second

issue, companies management need to bring an attitudinal

change viz. generate understanding about the research

process than tom-toming successful closure of out-licensing

deals.

Out-licensing may be a good revenue generator it however,

limits the Indian companys control in the progress of the

molecule. The experience of multinationals returning the

molecule to Indian companies has led to the thought whether

Indian companies can develop capabilities to take their

molecules beyond the clinical stage to the end market??

As more companies join the innovative research bandwagon

and the number of molecules in clinical trials increase,

confidence in discovery research is growing steadily. Indian

Pharma and India urgently need an India discovered drug to

up their credentials in Global Pharma. Not only will this feat

build Indian Pharmas confidence in innovative research but

also gain respect for Indian scientific innovations.


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CRAMS

Changes in the global pharmaceutical business contributed to

the advancement of CRAMS opportunities among IndianPharma. Indian biggies like Ranbaxy & Dr. Reddy proved their

mettle in the US market, garnering confidence in Indian

Pharmas scientific capabilities. The phenomenal growth in

International business boosted Indian Pharmas confidence to

the extent to challenging patents. Convinced about Indian

Pharmas expertise and to avoid generic companies that were

posing a challenge, Global MNCs started to deal with

companies in the CRAMS business, thus opening up a newbusiness segment for Indian Pharma.

Globally, CRAMS, is not a new business segment; it is new,

however for Indian Pharma. With the introduction of the IPR

regime in 2005, outsourcing to India by MNCs gained

momentum. Indian Pharma equipped with infrastructure and

scientific skills, which was at crossroads following the patent

regime, now found MNCs knocking its doors.

Indian Pharmas growth in the CRAMS business could be

attributed to three factors:

Cost control measures by MNCs Environmental concerns in the developed world The IPR regime post 2005


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GENERICS

For generics, 2011-12 would be a landmark year for Indian

Pharma. A number of drugs will go off-patent and the

generics market will reach its peak. Also, there will be pricing

pressure on generic players. Growth in the US market will

start diminishing with more players entering the fray. Infact,

profitability in the US market has been low, from 2005 itself.

The emerging markets look more attractive. In the near

future, Generic exports will continue to be a growth driver for

Indian Pharma.


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R e s e a r c h l e d c o m p a n i e s n e e d t o b u i ldu n d e r s t a n d in g a b o u t r e s ea r c h r a t h e r t h a n

bu i ld ing expec t a t ions on f ina nc i a l s

F ir s t In d i a r e sea r ched d r ug wi ll give a f il li p t ot h e I n d i a n P h a r m a s r e s e a r c h e ffo r t

I n d i a n P h a r m a n e e d s t o t h in k a b o u t b r i n g in g an e w d r u g to t h e m a r k e t , r a t h e r t h a n ju s t

r e s t r i c t ing t o ou t - li cens in g

U S a n d E u r o p e a n m a r k e t s a r e p e r c e ive d h i gh l ycomp et i ti ve and op por tun i ti e s fo r gr owth

l imi ted

B u s in e s s r e a c h i n e m e r g in g m a r k e t s w illi n t e r e s t t h e o b s e r v e r s

CRAMS is a p r o f it ab l e bus ines s , bu t no t a l ongt e r m p l a y. In d i a n P h a r m a w i ll h a v e to m a i n t a in

sc ien t i fi c knowledge a dvan t age , no t j u s t cos t

a d v a n t a g e

Com pan ies to wa t ch ou t fo r (ob se r ver s v i ew) :CRAMS - Dishm an , Divis an d J ub i lan t

Gener i cs - S un , P ira m al and Cip la

MNCs- GSK, Avent is a nd Pfizer

20 11-12 wi l l be l an dm ar k yea r fo r t h e In d i anp h a r m a i n d u s tr y

U lt im a t e ly, I n d i a n P h a r m a s r e s e a r c h

capa b i li t y w i ll de t e r m i ne it s f u t u r e t r a jec t o r y !!!


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The markets dont understand science. You see stock price goes up with an

announcement in the R&D space. But people are realizing that there is lot of hype

surrounding research deals. Eventually, they will start looking at the deals impact

on net revenue.

CRAMS is another fashionable word these days. But to be honest, not everyone can

do CRAMS: maybe just contract manufacturing. Chemistry is difficult.

Manufacturing capabilities are in place and people are getting orders.

Q) Tell us something about your interactions with industry leaders?

CEOs want to give less (information) and talk more. They have become extra

cautious in dealing with the media maybe because of the regulatory considerations.

Not much knowledge is shared. Scientific discussions are lacking. Even in press

releases, there is not much scientific content about products/ research. One needs

to understand whether the journalist in front of one is a fresher or someone who

has been tracking the sector for over a decade. One should also remember that the

journalist meets top people in the industry. Restructuring, plans, etc. are all very

exciting for your internal employees, but a journalist wants news.

Q) So, what makes news, for you?

The surprise element makes news. If you are doing something which someone else

has done six months back, its not news for the journalist. There has to be a crucial

element, something new. The size of the company doesnt matter if there is

something new happening- whether it really has precedence in the world.


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RxQuotient

Pharma Perception Research

RxQuotient is a Research initiative of Adfactors PR Healthcare Team.

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RxQuotient Jan09 Final

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