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Dear Pharma Veterans. This series of Blogs is to have a summary view of Pharma Business in Pakistan. It is a series spread over several parts covering the entire spectrum of Pharma business.
Pharma Business – BUSINESS DEVELOPMENT
BUSINESS DEVELOPMENT I
Business Development in Pharma has come to mean several things. There is an international description and interpretation of Business Development (BD) and there are local variants of very different nature and design.
Business Development is actually different from Sales Development. BD is aimed at strengthening and enriching the company business in the following ways.
- Portfolio Enrichment. Pharma companies usually design their product portfolio in groups that are aimed to focus on therapeutic specialties. Even the team names sometimes reflect this. For example, a medium to large size company will have teams arranged like this.
- Gynae, Obs & Women Health
- Neuro-Psychiatry, Mental Health
- Pediatrics, Child Health
- Gastroenterology, Hepatology
- Eye Care
- Respiratory Care
It is not an exhaustive list. Many more may be added to it. The job of BD is to find products which would be added to existing portfolio to strengthen it, expand it or enrich it. BD will identify products locally or internationally.
- Business Expansion. BD will try to find products or entire range of products which could be added on to existing business. For example:
- A pharma company is operating in Gynae, Pediatrics, etc. BD can find an entire range of eye care or Gastro-Hepatology to add a whole business unit. It is not necessary to register and manufacture such products first. You may get the products from some other source and start marketing. Later, you go for brand transfer or some other arrangement.
- A Pharma company is marketing oral antibiotics and does not have facility to manufacture sterile, injectable antibiotics. BD can find a toll manufacturer, or finished products from another manufacturer to be expand the business.
- A Pharma company wants to expand into Oncology. BD will find out a suitable range from Import, finalize it with marketing and management and initiate registration process.
- A Pharma company is going to general physicians, gynecologists and pediatrics but does not offer currently popular nutraceutical, nutritional supplements. BD can find a good source for such products and get these added.
As above, this is also not an exhaustive list. There are countless opportunities for business expansion and the process is virtually never ending.
- Diversification. As the name implies, it is adding a line of business which may be completely unrelated to existing business. It may likely be in the line of healthcare though. For example, a finished pharma products marketing company may think of marketing medical disposable products in addition to existing portfolio. Or it may offer some technology such as a robotic arm for arthroplasty. Or it may add cardiac Stents because it has a customer base in cardiology already.
Diversification is tricky. While it is planned on an existing customer base but needs more analytical working to see the feasibility/ viability of diversification.
- In-Licensing/ Out-licensing. This is the main activity that Business Development people do internationally. Research for new pharmaceutical products is mainly being carried out in the US, Europe and Japan. In the US particularly, there are numerous small upstart companies which are doing research for new products in several fields. True that the large companies like GSK, Novartis, Merck, AbbVie are also heavily into research. The difference is that the Big Pharma shall market their research products themselves while the small research companies do not have the capability to commercialize the products. These companies will therefore sell the rights to bigger companies at some point of research; usually after Phase III studies are cleared. This is a complex activity involving legal, contractual, intellectual property, commercial aspects and needs some really heavy work. BD works along with legal and commercial teams to carve out deals for such transactions. This activity is virtually non-existent among the generic companies in Pakistan because of the absence of research. It can be done with the registered products though. Every Pharma company has couple of hundred registrations lying idle which shall remain so because the holding company will never market these products. This can be a good ground for BD who can negotiate the transfer of registration against agreed sum of money.