Dear Colleagues! Today is Pharma Veterans Blog Post #162. Pharma Veterans shares the wealth of knowledge and wisdom of Veterans for the benefit of entire Pharma Community. It aims to recognize and celebrate the Pharma Industry Professionals. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. If you wish to share your stories, ideas and thoughts, please email to asrar@asrarqureshi.com for publishing your contributions here.
Continued from last……
The change started in 1980s.
Hilton launched Valodin, which was the generic version of Velosef (cephradine – Squibb). The generic product claimed similar efficacy with some price advantage and got a foothold in the market. As doctors used it, they found the claim to be acceptable. This success showed the light to other Local Pharma and inspired them.
During late 1970s, Ciba Geigy (now Novartis) had launched a new research anti-rheumatic/ analgesic, Voltaren (Diclofenac sodium). It became a huge success. In early 80s, Ciba had a big setback. Zia ul Haq, the then President of Pakistan, ordered to reduce the prices of Anti-TB drugs by 50%. Ciba was a major player and suffered badly. In addition, there were some other reductions also. For example, their nasal spray Otrivin price was reduced from 17 to 9 rupees. Ciba decided to roll back operations from Pakistan.
Voltaren demand was there but the company had gone back. In this vacuum, Sami launched generic diclofenac by the name Dicloran. Today Dicloran is a household name and the product sells for several billion rupees.
These were the early breakthroughs which encouraged Local Pharma to consider bringing generics of research products with high sales volumes. This also developed the confidence of doctors in the generic products. But this confidence remained restricted to acute-care products such as antibiotics, analgesics etc.
Chronic care segments (psychiatry, neurology, cardiology, diabetes etc.) remained safe from the onslaught of generic products for another ten years or so for two reasons. Local Pharma was reluctant because they thought it did not give quick sales (quick money), and physicians were reluctant because they were not sure of long-term stability of their patients on such generics.
Some corporates in Local Pharma became more affluent and cash-rich in this process. They did not have more knowledge to offer, they offered lower price already, what else could they do to get more business? Obviously, the third factor – customer services.
Customer Services profile started changing as more focus and money was poured into it. Small gifts were replaced by expensive gifts, and small services were replaced by larger services. But this happened gradually and insidiously over many years.
Back in early 1980s, Pakistan Pharma Market was heavily tilted towards MNCs. They had 80% or more share while Local Pharma has less than 20%. Currently, it has reversed. Local Pharma has 80% or more share of business while MNCs have less than 20%. Some well-known MNCs such as Roche, Merck, MSD, Organon have sold their Pakistan business to local groups and gone back. Some others are rumored to be considering the same.
Anyway, back to customer services.
As you know, generic products are similar in many respects. They do not have clinical data of their own, they rely totally on the research done by the innovator, and they are not required (in most cases) to undertake studies to show equivalence with the innovator. In summary, their cost of product development is small. If their branded-generic product gets good market share, it makes them cash-rich quickly.
I would remind you of the three factors influencing drug prescriptions.
- Merit of the Drug – generic drugs are more or less similar
- Price – most generics have similar prices. DRAP is also forcing same prices
- Customer Services – this is the only area where difference could be created
And this is where the most activity is happening right now.
We shall look more closely into this area in the next blog.
To be continued……
