India: Still a Land of Opportunity for MNCs

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For multinational companies, despite ‘pharmerging markets’ not holding the hype and allure they once did, India still stands as a land of opportunity for a variety of reasons. Novartis India country president Jawed Zia points out that “India, in terms of demographics, is the youngest nation in the world. The median age today is under 27 years. At the same time, it has a large aging population and lifestyle diseases together with a growing middle class will lead to a rise in demand for healthcare and hence pharmaceuticals.”

“Big Pharma companies should be interested in the health of the Indian population as we are 18 percent of the global population and nearly 20 percent of the global disease burden”

Sanjiv Navangul, Janssen

Suresh Pattahil, CEO of Ferring in India, sees opportunities for MNCs in market shaping, positing that, “An area where foreign multinationals can truly make a difference is market definition. If the market is not formed yet for diagnostic treatment choice or even origination, then you have real rewards to reap from being the first mover.” However, Pattahil is keen to caution that “If the market is already shaped and has become a commodity market, then foreign multinationals find it very difficult to enter certain segments. One has to judge how one wants to build and expand the business model in India and with a specialized portfolio and differentiated products then there is generally a higher chance of success.”

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If pricing remains a bit of a sore point, there are improvements with other aspects of the regulatory landscape. In May 2016, the government issued a National Intellectual Property Rights Policy with the aim of strengthening the country’s somewhat precarious IP regime and fostering new tranches of inward investment. As might be expected, such a move was roundly applauded by innovative drug developers. “Brands are there for a reason: they denote quality, the years or how much a company has invested in R&D globally, and how much you care about the patient and whether you have pharmacovigilance and sometimes continued medical education in place…I do not think that it is in the best interest of the patient for brands to disappear completely so this step is welcome news,” opines OPPI’s Kanchana TK.

Many of the multinationals invested in India not only to see the opportunities inherent in the country, but also the ethical importance of contributing to the economic health of the nation, bringing their treatments to the country and meeting unmet need. Roche’s Shravan Subramanyam, for example, sees his affiliate as, “not just a multinational organization operating in the diagnostics space. What we are doing in terms of enabling health is actually nation-building and contributing to the economy. India is a very labor- and people-intensive market. Not without reason is the country is known for its skilled labor and technology. If our people fall sick we lose an economic driver, which is the reason why the discussion around preventive healthcare and keeping people healthy is so vitally important to running the economy.”

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Sanjiv Navangul, managing director of Janssen, is clear that “Big Pharma companies should be interested in the health of the Indian population as we are 18 percent of the global population and nearly 20 percent of the global disease burden – it is an ethical responsibility for Janssen to be present in India.” Furthermore, Navangul feels that traditional pharma business models are not appropriate in India, suggesting that, “Simply providing medicines to patients, especially in a country with limited resources like India, does not solve the problem. We take an integrated disease management approach to supporting patients, which includes partnering on campaigns aimed at driving disease awareness and treatment adherence, undertaking medical innovation and R&D, and empowering a new generation of healthcare workers through training on clinical management of diseases.”

For Novo Nordisk’s Melvin D’Souza, it is the sheer numbers of patients affected by diabetes that drives the company’s activities in India. He notes that, “Novo Nordisk estimates that 46 million people in rural areas are affected by diabetes and that the number of patients will significantly grow to 73.5 million in 2030.” To combat this situation, D’Souza explains that, “In partnership with local health authorities and other stakeholders, Novo Nordisk in India helps more than 4,000 children through 21 ‘centers of excellence’ across the country where they provide free insulin, free consultation and free blood sugar check-ups twice a day to children under 18 with no income.”

Novartis has also been working to fill the gaps and improve access to medicine via infrastructure development through it Aroga Parivar (“healthy family” in Hindi) initiative, first launched in 2007. This program, Novartis’s first social business model, is “organized into cells that currently total 239. Each cell – covering 35-40 km – includes 60 to 75 villages and small towns with around 200,000 inhabitants. Today, the program operates across 11 Indian states, covering some 14,000 villages and small towns that are home to more than 32 million people,” notes Jawed Zia. Arogya Parivar broke even in less than three years and has been sustainable ever since, meeting both its commercial and social targets. It is expected to reach 44 million people through health education meetings and health camps by 2022.”

Writer: Patrick Burton

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