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February 2022 marked 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.
It is now time to strategize, as this was the purpose of this long exercise.
Strategies are made on these parameters:
- Strategies based on Strengths
- Strategies to mitigate Weaknesses
- Strategies to exploit Opportunities
- Strategies to avert Threats
We shall follow the same line of thinking.
Strategies Based on Strengths
Short Term/ Mid Term Market-based Strategies
- Pursue First Mover Advantage
- During the last twenty years, the Local Pharma companies who grew rapidly and attained top positions had two things in common: One, they introduced new products quickly and constantly; two, they introduced first/second/third generics of innovator products. Both factors have proven to be great business boosters. We have discussed introduction of new products already; we shall take up first mover adventure in detail here.
- It may be difficult to pinpoint which product triggered it, but it became a cult in early 2000s. Omeprazole generics were huge success because innovator product, LOSEC was quite expensive. Thanks to hard work by innovator company, the concept of Proton Pump Inhibitor was established. The generic omeprazole products only had to promote the low price, which they did effectively. Initially, the difference between innovator price and generics price was not very large, but still generics caught on. Later, the price difference grew larger and bigger. Omeprazole is among classic cases where generics are selling much more than the brand. Risek of Getz Pharma is over 8-billion-rupee product alone. There are several other omeprazole generics which are selling in huge numbers.
- There is no doubt that the introduction of generic products expands the market for that molecule. Every molecule has the same story. Ciprofloxacin, Ceftriaxone, Cefotaxime, Diclofenac sodium, PPIs, Famotidine, Cimetidine, and more recently, Sitagliptin are living examples of how the introduction of generics expanded the market for them. This analogy is not the same, but I believe Microsoft Windows would not become such a huge product if they had not let the replicas sell freely. They made money from developed countries and let the product sell cheaply in the rest of the world. After everyone got hooked on to Windows, Microsoft is trying to enforce buying of original Windows. Generic products are not unauthorized, these are registered and regulated by relevant health authorities, and after the expiration of patent, the innovator cannot stop introduction of generic products.
- Pursuing first mover advantage is easier here. The innovator products of several new products are not available here because their parent companies are not present here. Innovator products of Esomeprazole, Dexlansoprazole, Naproxen + esomeprazole, Vildagliptin, Linagliptin, Empagliflozin were not launched in Pakistan, but their generic products have done great business. I am sure if the innovator brand is launched today, it will not be able to do much.
- If the first/second/third generic is promoted vigorously, it does significant business. Case after case proves this fact. From Ciprofloxacin to Empagliflozin, the same story has been reported. I would emphasize that both actions are important: launching first/second/third generic; and promoting it aggressively. A first generic promoted listlessly by a company would not achieve much.
- The most important thing about first/second/third is that it is accepted quickly now. I remember the launch of first/second generics of clopidogrel. Plavix was not registered here but was smuggled and sold over the counter at 100-125 rupees per tablet. The first generics – Lowplat by Pharmevo, and Noclot by CCL put the price at 15 rupees per tablet. This huge difference caused some concerns and doubts in mind. It took time and effort to make these accepted. Both finally became big brands. That was in 2002, twenty years ago; the situation today is different. The immediate success of gliptins, gliflozins and dexlansoprazole tells us that the acceptance of generic at any stage and for any product is a norm now, not exception.
- Bringing a very late generic and trying to make it a brand also does not achieve much because the bus has been missed. It is better to keep expectations at a modest level and approach the market accordingly.
The launch of first/second/third generic is a huge advantage and must be exploited by all those have the capacity to do so.
To be Continued……
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