Dear Colleagues! This is Asrar Qureshi’s Blog Post #632 for Pharma Veterans. 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.
Opening Note
February 2022 marked my completing 47 years of working in Pharma Industry. Allah be praised. I am still working. 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.
STRATEGIES
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. We have completed Strategy Recommendations based on Strengths and Weaknesses.
Strategies to Exploit Opportunities
- Business Development – Another very lucrative opportunity is business development. Though business development is not as well understood, and much less practiced in its real form. The expected benefits do not accrue, therefore.
- Business development internationally is about in-licensing and out-licensing. There are several forms in which it may be done. There is an increasing trend in the US and Europe for establishing small, agile, focused research companies. These are run by technical people and funded by venture capitalists. These companies expedite research for finding new molecules, new targeted therapies, new platforms for developing new drug delivery techniques, new drug delivery systems and so on. They explore, identify, and bring the new entities to the stage where these are ready to be taken up by a large commercial company which would do phase II, III studies, prepare for registration, get the registration, and market the product. The research company gets a handsome money for its research, and the commercial company shortens its development cycle by a significant margin. It is a win-win for both parties. However, this model is not applicable in Pakistan and other countries like ours. The second form of BD is that a company has gone through all stages of research and development, has got the registration done, and has marketed in some region. Even within Europe, it is not possible to market a product across all countries simultaneously. US is a different story, it is the biggest of them all and is another level of marketing altogether. The company offers other companies to license the rights of their product(s) and market it in designated regions. Someone may take it for China, or Eastern Europe. European companies usually do not venture marketing in the North America by themselves; they search for a partner. For this activity of in-licensing and out-licensing, business development people lead. This is also not done in Pakistan but can be considered.
- We have had certain examples in Pakistan where the companies licensed some product(s) from Europe mostly. Pacific Pharma was probably among the first. They had license of Merrel Dow from US and Lepitit from Italy. They manufactured their products here under their license. PDH had UCB which was originally Belgian company, I guess. Much later, CCL licensed one product from Biocodex France, and Himont licensed Ferplex from Italpharmaco, Italy. Some of these licenses ended in bad taste when our local companies violated the terms of contracts. The most recent form is taking over of multinational brands while they exit Pakistan market. Highnoon may be mentioned separately. They started and built their business on licensed products and later added more. They had some of the finest products. However, they lost almost all companies due to international mergers and acquisitions. No fault of theirs, but they were the victims of international situation. It does not mean that this avenue should be closed.
- Many Pakistani companies bring products from abroad under distribution agreement. They do the registration in their name, import the product in finished form and market it here. This is also a form of business development. Some companies have built big business with this model. They acquired and registered scores of products and used these for institutional business. Some sublet some products to some other interested company for marketing. Some such brands have become iconic in status and volume. Some of these products cannot be manufactured here because of technical issues. Technology transfer may be possible, but many companies do not wish to invest on manufacturing facility.
- Finding new products for contract marketing is also a function of business development. They scour and see who has registered the products that their company needs. Mutual exchange of products may also be considered. Both companies may have certain products which may be interesting for one another. These can be exchanged for mutual benefit. However, one-way acquisition of products is more common.
- Finding contract manufacturers for own products is also a function of business development. The contract manufacturing may be necessitated by dedicated area requirement, capacity issues, renovation, or some other reasons. Contract manufacturing is the future of Pharma business, although DRAP does not recognize it even today. If they accept it, they will formulate rules to regulate this business model and all parties shall be benefitted.
- Suggesting new products to Marketing is also a function of business development. BD people scan and see which new products are being launched in developed countries, which patents are going out and then recommend certain products. They also look at local market and see which new products are being launched by competitors and make recommendations on this basis. They may also look at the IMS (now IQVIA) figures and see the performance of new molecules. Recommendations may be made on the basis of market performance.
Business Development is a multidimensional portfolio of activities. It is a great opportunity for the Pharma Industry to develop this function and take fullest advantage out of it.
To be Continued……
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