Dear Colleagues! This is Pharma Veterans’ Blog Post #534. Pharma Veterans welcome sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi onWordPress, the top blog site. Please email to asrar@asrarqureshi.com for publishing your contributions here.
Continued from Previous……
We divert our focus to Pharma Industry in Pakistan.
Pakistan market, like all other regional markets, was dominated by Multinational Pharma companies. They held the leadership position because only they had specialty drugs. Every MNC marketed their own research products, competing fiercely in therapeutic categories, but not infringing upon anyone else’s territory. Local Pharma had few products licensed from Europe, and their own formulas in basic categories like antibiotics, antidiarrheals, tonics and cough syrups. They also had their loyal customers and well-known brands. People from that time would remember Waterbury’s compound, Eplacherry syrup, Combinol and Pulmonol cough syrups and so on.
The method of working was similar. All companies had sales team comprising of medical representatives and managers who were based at selected headquarters and traveled around. They visited doctors and promoted products to get prescriptions, and pharmacies to get orders. The difference was that the Local Pharma focused more on General Practitioners and Pharmacies, and MNCs focused more on the specialists and consultants. The work ethic was similar, one-on-one promotion of products, promotional folders, and some free physicians’ samples. Occasionally, there may be a small give-away for clinic to remind some product(s). There were no incentives of any kind whatsoever linked to business.
The MNCs started to change the game. When they brought in new, more expensive products, they offered incentives in the guise of academic activities, continuous medical education programs, international medical conferences, sponsorship for studies, and more. The greatest attraction were foreign trips. Local doctors took the bait happily and obliged through uncounted business to justify the foreign trip. Even today, the foreign trip has its charm, though senior doctors had had many trips to US, Europe, and most other mentionable locations. They would still like to go, but you have to offer some new, exotic place. The MNCs enjoyed this territory exclusively for several years, though the competition among MNCs heated up on this count. Some high-profile, high-potential customers had a queue of foreign trips in waiting round the year. We observed the scenes where a customer arrived from one trip and handed over passport to the other representative right at the airport for the next trip.
Generics started waking up to the new realities during the 1990s. The change occurred due to following reasons.
- Local Pharma developed and marketed generic versions of new products launched by MNCs in the recent times. Their cost was low, but they sold at high prices, not much lower than the MNCs. This brought abundant cash flow which the Local Pharma could spend to compete with the MNCs. It worked as a rising spiral: more new generics, more money, and more competing power. The Local Pharma became strong and started flexing its muscles. It was a trend across the region also. The patents were blatantly violated, and no one could do anything.
- Experienced, trained professionals from MNCs were lured and enticed by the Local Pharma. They joined willingly and applied the same playbook which they had been using in the MNC. Money was not an issue, and it was put to great use. Yes, there were wastages also, but by and large, it changed the Pharma landscape. Very quickly, the Local Pharma challenged the MNCs hold on foreign trips. And boy, they went overboard with it. Rather than being very choosy like the MNCs posed to be, the Local Pharma opened avenues for everyone. Planeloads of doctors were hauled to locations in Central Asia, South Asia, Southeast Asia, and Europe. The situation was akin to when Lollywood or Bollywood do the Hollywood action the local way. The quantity is big, and the intensity is fierce, but the technique is missing. It is for the people who were engaged in this spate of activities to analyze the impact, gains and losses.
- Local Pharma upgraded manufacturing facilities and started some R&D also to develop new products in a better way. The top few companies got into the race of launching the new generics as the first mover (most preferred) or second/third mover. The marketing push was very strong, team sizes were expanded, and money was spent lavishly to promote new, ever more expensive generics. The cycle continues. By and by, the market has become unevenly distributed. Top 100 companies have more than 95% market share, while the rest of the 600 companies are struggling in less than 5% market. Simply put, the rich are getting richer, and poor are getting poorer. At the current count, 74 companies have joined the billion club, which means they have an annual turnover of one billion or more. It is not about the size; it is about spending capability which is the decisive factor in today’s market.
- The MNCs had mega mergers, buy-outs, divestments, which reduced the number of them operating in Pakistan and their marketing power significantly. It also made many experienced persons surplus, which had to come to Local Pharma anyway. The Local Pharma got into better bargaining position. Local Pharma acquired brands from MNCs who were leaving and also acquired their manufacturing facilities thereby increasing their claim further.
We shall see next what the implications of MNCs leaving Pakistan are, and if everything about the rise of Local Pharma is good.
To be Continued……
Disclaimer. Most pictures in these blogs are taken from Google Images which does not show anyone’s copyright claim. However, if any such claim is presented, we shall remove the image with suitable regrets.