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February 2022 marks my completing 47 years of working in Pharma Industry. Allah be praised. I am still working. The first half of my working career was spent in Multinational companies, and the latter half in the Local Pharma, making me well-versed with both innovators and generics markets. I also had the opportunity to work in business as well as operations.
My journey of near half century is also the journey of Pharma Industry in Pakistan. Great changes have occurred in this time and a lot could be written about it. In my blogs, which were started about four and a half years ago, I have covered several topics related to Pakistan Pharma Industry. This multi-part series shall do and review the SWOT – Strengths, Weaknesses, Opportunities, Threats – of the Pharma Industry.
SWOT – STRENGTHS
As mentioned in the introduction of SWOT, Strengths and Weaknesses are internal while Opportunities and Threats are external.
Another point to mention is that my focus is mostly on Local Pharma which is dominating the Pharma Industry since many years.
- Agility – Local Pharma is much more agile than MNCs. It is due to short chain of command which is available at hand. The owner/CEOs mostly spend long time in their enterprises. The approvals stop at them, and the decision may even be made in few minutes at times. Secondly, there is no approval limit for the Owner CEO, and he can approve anything he considers fit. Thirdly, the compliance issues are not the problem of Local Pharma owners. They mean business and can bend the rules to suit them. These facts lent so much agility to Local Pharma, and it was fully exploited by the smart marketers. Their counterparts in MNCs were getting more and more restricted due to increasing pressure from parent offices for compliance. Agility helped Local Pharma greatly in taking lead and then dominating the market.
- Competitiveness – We can divide the Pharma Industry history of around 70 years in two equal phases: first 35 years when MNCs ruled the roost; and second 35 years when Local Pharma started rising and finally took over. During the first phase, local pharma did not even try to compete; they were contented to play in their space, which was mostly the lower end of the market. MNCs confined themselves to upper end of the market, but their clout helped in making their products sold and used even in remote places where no one from the company had ever set foot. Pfizer and Glaxo were household names; Glaxo more so because of their infant formulas which were the first and the only ones on the market for quite some time. They advertised their Glaxose-D on media for many years as a source of ready energy. After many years, Rafhan brought Energile and challenged the hegemony of Glaxose-D till the public got wiser and shunned both. Local Pharma got the courage to compete slowly and over time. They were tentative in the beginning, but when the MNCs did not bother, ostensibly due to their sense of superiority, they got bolder. Today, Local Pharma competes with MNCs head-to-head and does not let any occasion go without competing till the end. The competitiveness of Local Pharma is an important strength.
- Brand Building – Brand Building was exclusive domain of MNCs during first phase. True, that some products of Local Pharma also started achieving enough traction to be labeled as ‘Brands’, but their presence was still patchy. Karachi-based companies were stronger in Sindh, Balochistan, and South Punjab, while Lahore-based companies were enjoying greater market share in Central Punjab, North and NWFP (now KPK). Hilton, Sami, Highnoon, CCL, HiQ, Atco, Pharmevo started integrated work on building brands on the pattern of MNCs. As pointed out earlier, trained people from MNCs had shifted to Local Pharma and were creating and leading the charge. Getz came later but surpassed all of them. Presently, we can count around 50 brands of Local Pharma which have sales of one billion rupees a year; some are multibillion also. The biggest local brand is Risek of Getz which is exceeding 8 billion. Brand Building helped Local Pharma to generate sustained streams of revenue, which was utilized to build more brands, it is now a major strength.
- Segment Building – Developing therapeutic segments was also exclusive domain of MNCs. They had the clinical studies, the information, the comparisons, and the expertise to develop therapeutic segments. Metabolic disorders such as diabetes and cholesterol, cardiology, rheumatology, psychiatry etc. have developed right under our eyes. The scale, size and revenue has grown disproportionately in a short span of time. Local Pharma came into this segment later and had to struggle before becoming a vibrant force challenging MNCs.
- Customer Development – Historically, customer development was exclusive work of MNCs. The customers also wanted to align with them because they had worldwide connections, money, and research products. Local Pharma did not have much to offer in these areas. They could not attract KOLs – Key Opinion Leaders and the KOLs were not interested either in getting cultivated by the Local Pharma. Things changed slowly. First, the acceptance of products was built, then trust on the quality and service and finally trust on the corporate was established. Today, there would be hardly any important customer who would not be associated with the Local Pharma.
To be Continued……
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