Dear Colleagues! This is Pharma Veterans’ Blog Post #535. 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 firstname.lastname@example.org for publishing your contributions here.
Continued from Previous……
We paused the last post on two questions which we shall address here and add one more.
What are the Implications of the MNCs leaving Pakistan Market?
Six major MNCs merged to become one; the case in point is GSK. Pfizer is an amalgamate of Pfizer, Pharmacia Upjohn, Wyeth, Lederle, Parke Davis, Warner Lambert. There are several other examples also. Roche, Merck Serono, MSD, Janssen, Organon have sold their local businesses to Local investors/Pharma. There is great change in the Pharma landscape, and it has several implications.
One, the MNCs were great training houses for professionals. They invested heavily in the development of people and built their technical and soft skills. They could do so because they followed their international guidelines and considered this expense as investment. In addition, they also had training resources developed in various parts of the world and made available to everyone. This great source of learning has largely dried up and shall become more so after some time. Local Pharma neither has the technical capability nor the heart to spend money.
MNCs developed best practices and shared with their affiliates worldwide. The richness and authenticity of such practices are great. Even regional players like Julphar UAE and Hikma Jordan do not have this facility. The local affiliates shall have to do with local flavor only. Every Local Pharma follows its own practices and does not want to change, though most of these practices are outdated and counterproductive.
MNCs led the brand-building effort. They taught how to do it and taught the patience required to do it. They worked on every product to make it a brand. Most becamea, some did not. Most Local Pharma have 1 – 5 brands, out of a range of 150 products. It is because they do not have expertise and patience to build a brand.
MNCs brought new therapeutic concepts and promoted them tirelessly for years. Several treatment modalities changes and innovations have deeply changed the treatments and outcomes. New concepts will not be brought if a few consultants sponsored by Local Pharma go and attend a medical conference abroad.
Most new research products becoming available worldwide are expensive and niche. MNCs can afford to develop and market such products because they have the entire world as their market. Local Pharma just cannot do that.
New product development is now taking over one billion US dollars. MNCs have huge resources to spend on development, and they expect to recover it quickly. Local Pharma does not have this possibility.
The Sum Up is that the departure of MNCs will create long term void for the Pharma Industry in Pakistan.
What are the Implications of the rise of Local Pharma?
Local Pharma rise has its own things to consider.
The market has expanded rapidly as the number of marketers multiplied.
The reach of people with less resources to treatments increased because of lower prices of drugs. This positive development was later offset by the uncontrolled rise of medical laboratories where the patient is forced to pay much more, and the uncontrolled increase in the consultation charges by the doctors.
The market dynamics have changed for the worse. The competition is no more based on merit, it is based on greed which is rampant on both sides; customers, and businessmen.
Mediocrity has risen because professional development opportunities have dwindled. Mediocre seniors are hiring staff who is more mediocre than them and eroding the culture of excellence insidiously.
Cost saving is focused on people, their incomes, and their training. The resources for learning and development have dried up in most places.
Disparity between cadres and their social status has increased. The top cadre has managed to increase their perks and benefits, even if it had to be done at the cost of their juniors.
Expression has stalled. Freedom to speak one’s mind is prohibited because management at all levels has become autocratic. Security has been replaced by scare and encouragement by oppression. There are stories after stories of how even the junior managers can suppress dissent and extort money out of their subordinates.
What is the Way Forward?
The situation is stark, but not hopeless.
The market is driven by the top fifty companies. They have come to realize the wastage of resources caused by blind sense of competition. There is some indication that better sense would start prevailing from somewhere.
Cost of selling has risen astronomically, and efforts are being done to contain it.
Steps are being taken to avert deterioration in the quality of human resource. Attracting, hiring, and retaining the talent is being done by larger companies. Smaller companies shall have to follow.
Modern Performance Management Systems are gaining entry which are more likely to inculcate and promote holistic management practices.
Public opinion has become openly hostile against Local Pharma and its customers, particularly in the urban areas. This is also working as a deterrent.
Finally, the senior management is feeling the heat caused during the last two decades and considering making amends.
These are positive signs that we can see coming up here and there. We expect that these will strengthen further and bring more and rapid improvement.
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.