Management INSIGHT FOR MANAGING PHARMA

Using consumer’s intuitive logic to influence OTC buying behaviour

The consumer’s belief regarding ailments and how medicines work influences their buying and
consumption of medicines. Susan Josi – Managing Partner, Sorento Healthcare and Anil Khanna -
Business Head, CubeX analyse some common examples and advocate building these learnings into the
strategic management of OTC brands

Page 35

Welcome to the Idea Exchange. Let me start by asking know something about everything, ie. every role and function in the company.
you about your early years in the pharmaceutical You can't say, “I am working in this department so I need to know only what
industry. You've worked in MNC pharma happens in my department.” And also, the type of bosses I had encouraged us
companies like Ciba Giegy, and Parke Davis and to know about everything. I mean, if I have to supply a raw material, then I
also in a home-grown leader like Wockhardt should know everything about that raw material. And if I have to buy a raw
India. So what are the differences you found material, then I should know everything about the seller of that material.
between the two groups and do they still exist Similarly, I should have some idea of other functions like Marketing, Stores,
today? Warehousing, Scrap, third party operations etc as well. So IDMA is giving me
Well I think as of now, there is not much an opportunity to give back what I learnt in the industry.
difference between an Indian owned company
and an MNC because over a period of time, the
Indian entrepreneur has become extremely
professional and some of them are now giving the
Representating the
national sector
MNCs a good run for their money!
But yes, when I started out in the industry
over 25 years ago, the scenario was quite
different. MNCs had a different culture,
in the sense that they had
excellent systems because
of their global experience
pharma industry
and the huge training
budgets they had. Of
course Indian A familiar face at most events related to the
companies are coming pharmaceutical industry in India, Daara Patel,
up as far as systems Secretary General, Indian Drug Manufacturers'
are concerned, but as
far as training budgets Association (IDMA) has been 'batting for Indian
are concerned, that pharma' for the past half decade. In this Idea
gap still exists today.
At the same time, I Exchange moderated by Viveka Roychowdhury,
found that the Indian Editor, Express Pharma, editors and
entrepreneur was very correspondents of the Business Publications
quick in taking
decisions so there was Division, Indian Express quiz him on the
some sort of frustrating yet fulfilling aspects of his job ...
happiness that you
would go with two
suggestions and your
boss would immediately
pick up one, whereas in
MNCs in those days, things
used to take some time
because the chain of
command was very long.
So both had their plusses
and minuses and I have been
fortunate that I have worked in
both types of organisations. I Speaking about what you learnt during your years
have had bosses and superiors in the industry, you survived one merger and
who were very passionate acquisition (M&A) yourself, when you were
about their work and the working with Warner Hindustan and it was
pharma industry so it was merged with Parke Davis. Today, the industry is
good working with them. seeing a plethora of M&As. What would you advise
And now I am extremely professionals in this industry, given the
happy coming back to all I apprehensions of layoffs as departments and teams are
have done all these years, in consolidated etc? Would you say this trend of M&As is
my role as the Secretary good for the industry?
General, Indian Drug I think for the Indian pharma industry, M&As are bound
Manufacturers' Association to be there and some sort of consolidation is bound to take
(IDMA). My experience in place. There are over 10,000 registered pharma
MNCs has certainly stood me manufacturers across the country, and we are not even
the test of time because talking about the mom-and-pop sort of organisations, who
somehow the culture in most supply in a particular district or hospital. So I feel M&As are
MNCs is that you need to bound to take place and that's going to be good for the

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industry, for the companies, the
government and for the patients as well.
We have to understand that M&As
take place when there are synergistic
benefits for both companies. Of course,
things are not that scary when it's a
merger but yes, when it's an acquisition,
it's human nature to worry and be
apprehensive. But in my case, God has
been kind and my boss and myself were
actually retained by the company that
acquired our company. So while that was
fortunate, what I remember is that we
were very cooperative, even during the
due diligence or when our counterparts in
the other company wanted some
information. We were all very open about
it. Of course, we were all very young at
the time so we were not very afraid about
(being out of) a job and that also gives
you some strength.
So I can only say that if you are
upfront, honest and capable and your
work speaks for you, I don't think
anybody needs to be afraid about M&As
because the pie is too large and if not in
your present company, certainly some
other company will poach you. So I don't
see any major problem for a good
employee with a lot of merit in him.
You've been with the pharma industry
for almost your entire career, except for
a short stint with Jet Airways and the
Sinar Mas Group in Indonesia. So do
you ever regret being in such a
regulated industry? You could have had
as much as a career in aviation or any
other industry ...
Maybe, but 10 years ago, when I was
with Jet Airways, the aviation industry
was no doubt growing and had good
support the patent holder.
prospects, but it was still very owner
driven and there is a learning curve for
anybody to come to grips with it. I
certainly do not regret my two year stint
with Jet because the company and bosses
I worked with lived the airline. They ate,
drank and slept Jet.
So it was great working at Jet but
around that time, I found that the Indian
pharma industry was taking off . To be
very honest, there were not many jobs
going at senior levels at the time, because
of the M&As, so I thought that this (the
position with IDMA) would be a great
opportunity for me because it would be
both a good training as well as a chance
to use my knowledge gained over the
years. I was already familiar with the way
both IDMA and Organisation of
Pharmaceutical Producers of India (OPPI)
worked because I had worked with both
Indian companies as well as MNCs. At the
same time it would be a chance to give
back something to the industry from
which I gained so much.
So what are the 'hot potato' issues
IDMA is tackling today? What's top of
your agenda today?
I could list out many issues but some
are more frustrating than the others. Like
the Pharma Policy which has been
delayed and is on the back burner right
now. Most people in the industry are
happy with the old policy but certainly
everybody wants to have a Vision of
where this industry is going and in order
to have a proper vision, mission and
goal... to have proper investments you
32 EXPRESS PHARMA www.expresspharmaonline.com
need to know what the government
wants from this industry which is not
coming out clearly. In a way, the industry
is also responsible and in a way the
government is also responsible for not
coming up with a very pro-industry policy
because unfortunately government is also
not understanding that this industry is so
matured in our country that competition
is playing a very big role in keeping prices
under check, getting new products, giving
patients products at affordable prices,
meeting quality standards. But at the
same time we need some sort of profits to
plough back into the business so that we
can cope up with what's happening in the
global market, so that we can invest in
R&D, new production lines, new drug
delivery systems, packaging material,
protect ourselves from spurious drug
manufacturers and so many other
challenges. So a delay in a progressive
drug policy is a cause for concern.
Another cause for concern is the fixed
dose combination (FDC) issue. There is a
High Court judgement right now on this
so it is suo moto. We've been trying to tell
the Ministry that as long as the
formulation has been in the market for
20-25 years, has a proven track record,
shown not much adverse reactions and
patients are benefiting from it, it should
be OK with the FDC. Because after all
FDCs give the patient a more convenient
dosage schedule as the patients get the
choice of taking one pill instead of
multiple pills. The FDCs are developed to
IDMA is not against target a single disease, but may also target
patents. We support multiple diseases or sicknesses and
patents and we certainly delivered in single doses as tablets,
capsules etc. and reduce the burden of
having to consume multiple pills by
After all, they have spent patients. More and more FDCs made in
money on R&D, they've India are being accepted as the ideal
worked so hard and they solution to provide quality affordable
need to be remunerated medicare to the patients worldwide. This
is borne out by the large number of FDCs
but not at the cost of approved by US FDA for sale in USA,
creating a monopoly most of them manufactured by Indian
companies. So the government should
make the policy clear on this instead
making the manufacturers wait
anxiously..
We have been in discussion with the
DCG(I) and the FDA authorities of various
states, especially Maharashtra and
Gujarat, where we have come up with a
list of approved proven FDCs. We are
clear that we will not support any of our
members who are making formulations
other than these. On that, we are very
much with the authorities. With some
borderline cases, certain bioequivalence
studies need to be done on a fast track
basis. A practical view has to be taken on
such products. But we definitely do not
want this stalemate to continue. We want
a decision either ways fast.
Another issue is data exclusivity,
which we don't want while a certain
section of the industry wants. But I want
to clearly state that IDMA is not against
patents. We support patents and we
certainly support the patent holder. After
all, they have spent money on R&D,
they've worked so hard and they need to
be remunerated but not at the cost of
creating a monopoly. So given the current
scenario, we certainly respect patents
because tomorrow there will be Indian
companies who will file patents and have
August 16-31, 2010
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to defend them. So we don't want to be
very dogmatic about patents but the
government has to take into
consideration our economy, our patients'
interests, our industry's interests, and
then come out with prudent and
progressive patent policies rather than
just be carried away by what is
happening in other countries. Surely,
when those countries came out with their
patent laws, they did not consider what
happened in other countries! So I don't
see any reason for us to do so.
For instance, the government has now
taken a pragmatic approach to pre-grant
opposition, which was not the case
earlier. Another issue is that IDMA is a
fine mixture of companies right from the
micro, small, medium to large Indian
companies. So we have to walk the tight
not support the SSI. As long as an SSI is
manufacturing goods in a registered
premise, with a genuine license from the
drug controller's office, he should be able
to compete everywhere. So we are taking
up these issues on behalf of the SSIs.
The Department of Pharmaceuticals
(DoP) feels that the industry has not
responded well to the CLCSS scheme, so
IDMA has taken up this issue asking SSIs
to take advantage of this scheme. IDMA is
fighting for the cause of SSIs but the
progressive ones.
Plus, we do not want to lose track of
what's happening in the international
arena because many of the home-grown
pharma companies are today the 'Indian
multinationals', as they say. So we have
to take care of their needs as well, like
how they want the image of the industry
financial implications for companies,
which needed time, more space so we
supported them but then we also knew
that we had to draw a line as we cannot
endlessly support them if they don't fall
in line.
In such cases we do have a conflict of
interest but then ultimately if members
realise that our intentions are very clear,
we do get over these problems.
Sachin Jagdale, Express Pharma: Many
drugs are going to go off patent in 2015,
how is IDMA helping its members gear
up this scenario?
We have a lot of seminars,
workshops, training programmes and
harmonisation meetings with the Indian
Pharmacopoeia, the UK MHRA, ANVISA,
USP etc to help keep our members

I personally believe that we must now

move away from vanilla generics to
generics which add value. We will
certainly do everything to ensure that
our members capture a very larger
share of the generics market through
value added generics

rope many a times because basically we
have been formed to take care of the
national pharma sector. The sector really
flourished in the process patent era,
thanks to the late PM, Indira Gandhi's
support. Now, IDMA's challenge is to
hand-hold the SSIs as well to the next
level. A certain section of SSIs are the
type of guys who say 'No' to everything,
and sit on the fence. For instance, they
feel it's too tough to upgrade to Good
Manufacturing Practices (GMPs) or more
recently, when the government came out
with new Good Laboratory Practices
(GLPs) two years ago. Everybody said it
would be good for the image of the sector,
etc, but we are still having problems
convincing a few members to implement
this. But a majority of SSIs are very
progressive and IDMA will always stand
up for them whenever they have a
genuine problem.
For instance, public sector concerns
like the Railways, Coal India, SAIL, the
Maharashtra government etc have very
stringent rules for qualifying for tenders.
We have met everyone of the concerned
authorities to get them to revise certain
parameters like being among the top 100
as per ORG-IMS, or having a minimum
turnover of Rs 35 crores or be in the
industry for at least 20 years. These do
to be shaped, what kind of path they
want to take, etc.
And that's the advantage of an
Association like IDMA, we do not have a
limited agenda. Yes, we do have certain
focussed agendas, but we are there for
everybody in the National Sector Pharma
Industry.
Rita Dutta, Express Healthcare: Has
there ever been a conflict of interest
between these different members?
IDMA represents companies right
from those with a turnover of a few crores
to those in the thousand crores bracket so
yes, it does happen. For instance, we had
a problem in the case of excise free zones
like Baddi, Uttranchal. While there was a
certain section which benefitted from
these zones, and though it was good for
the excise free zones, unfortunately some
SSIs had to shut down as bigger
companies started moving to or sourcing
from these excise free zones. Certain
states like Maharsahtra faced tremendous
problems like closure of a number of
pharma companies.
Another example is when IDMA was
in the forefront of getting the deadline for
the implementation of the revised
Schedule M postponed. Getting in line for
the revised Schedule M had a lot of
abreast of the changing regulations, etc
and gear up for the opportunities that this
represents. So therefore as I said, we are
not dogmatic about patent laws because
tomorrow our own members may have a
problem. I personally believe that we
must now move away from vanilla
generics to generics which add value.
That is where IDMA can play a very lead
role by taking our members to certain
conferences, by bringing certain
consultants, to make them aware of what
is happening across the world. Generics is
an idea whose time has come, in fact
today even MNCs are getting into
generics in a big way.. So we are very
upbeat about this and we will certainly
do everything to ensure that our members
capture a very larger share of the generics
market through value added generics.
Usha Sharma, Express Pharma: What
are IDMA's suggestions to the
government as far as schemes for SSIs
are concerned?
We have been telling the government
that they have not been doing enough for
SSIs. Even the CLCSS scheme was
brought in late. Revised Schedule M was
supposed to be implemented from 2005,
whereas the CLCSS scheme was brought
out only in 2008 so most people had

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already fended for themselves. Now, the
revised Schedule M is almost on par with
WHO GMP but still there is a gap. So after
several meetings with the DoP, they have
agreed to come up with a good scheme to
give monetary support to progressive SSIs
who want to upgrade from revised
Schedule M to WHO GMP. They will be
given monetary and banking support at
proper payment schedules and interest
rates. So also on the tenders issue, where
we have told departments and hospitals
that 20 percent of their tenders should be
reserved for SSIs irrespective of whether
they meet your criteria, so long as he is a
registered manufacturer with a license
from the DGC(I), at least his application
should be accepted and he shoudl not be
disqualified.
Similarly we've been telling the
government that they should relax the
norms for data required from SSIs
because they have limited staff to compile
this data, unlike MNCs which may have
entire departments looking after their
data needs. If he attends to all these
criteria, he may not have the resources to
focus on quality & delivery. There should
not be a compromise on quality but the
government should look at what other
criteria could be relaxed.
Usha Sharma, Express Pharma: What
are your views on the government's
move to put more drugs on the price
control list via the DPCO?
Obviously medicine prices should be
under proper scrutiny, but I think that the
government should realise that our
industry is so mature that competition
keeps prices under control. There are so
many new players today that the market
forces keep down prices. And fortunately
the DPCO has the right to put any product
under price control even if it's not on the
price control list. For instance if there is a
price increase of more than 10 percent
over the last 12 month period, the DPCO
has the right to question you and if you
cannot convince them, they can pull you
up. But too much of price control is
unnecessary as it will harm the patient as
well as the industry in the long run. If you
look at the history of production under
price control, many manufacturers of
price controlled products simply stop
making these products, and then the
patient has to use other substitutes which
may not be as effective but are thriving
because they are out of price control.
Nagesh Joshi, Express Channel
Business: How will M&As affect the
chemists and druggists and how does
IDMA protect the interests of this
group?
M&As do not have a direct impact on
chemists and druggists. As per DPCO
pharma manufacturers are supposed to
give the chemists and druggists a certain
margin. But yes, competition is giving rise
to unhealthy practices like inflated
margins to push stocks, etc. IDMA has
been advising its Members to reduce
prices voluntarily wherever possible and
also relook at the margins offered to
trade. Our main objective is to change the
image of the industry from a profiteering
industry at the cost of consumers to an
industry, which works for the betterment
of ailing humanity. We are confident that
34 EXPRESS PHARMA www.expresspharmaonline.com
we are progressing towards achieving our
goal of providing "Affordable Medicines
for All".
Reema Sisodia, Express TravelWorld:
We've read about unethical practices
like hospitals using expired medicines,
the nexus between medical
representatives/ pharma companies
and doctors as well as cases where
ayurvedic medicines are being
adulterated. What is IDMA doing on
issues like these?
As far as the first issue you
mentioned, ie. hospitals using expired
medicines, the FDA should intervene and
take the hospitals to task. All pharma
companies have strict SOPs to follow in
the case of expired or substandard
products. They have to be destroyed in
the presence of an FDA official, a senior
official of the company, I don't see why
hospitals are not made to follow such
procedures as well. There should be a
whistle blowing system in hospitals to
bring this to the notice of the Authorities..
The government should
relax the norms for data
required from SSIs
because they have
limited staff to compile
this data
On the relationship between medical
representatives/ pharma companies and
doctors, IDMA and OPPI have jointly
released a Code of Conduct, which we've
submitted to the Government and it's
with the Legal cell. Unfortunately, it's on
the back burner now, because MCI came
out with such a stringent code of
conduct, that it's not possible to give
doctors anything above Rs 1000/- and
you cannot take the doctor even for a
conference which is a genuine learning
opportunity. You should know where to
draw the line. Giving the doctor a pen to
remember your product is OK, but giving
him a refrigerator is not OK because a
doctor's judgment is bound to be affected
by such practices. As far as Ayurvedic
products are concerned, there is a
realisation now that we need to know
more about them because they too have
side effects, previously thought to be only
seen with allopathic medications.
Reema Sisodia, Editor, Express
TravelWorld: We've also heard rumours
that Dr Batra uses steroids, could you
care to comment on this?
It's very difficult for me to comment
on this, but yes, we have been hearing
such rumours as well. The use of steroids
guarantees quick results and that could
explain how some of these homeopathic
clinics are giving quick results, when
homeopathy is supposed to work over a
longer period. It's been a suspicion for a
long time but it's being highlighted only
recently because some of these
homeopaths have over the years become
very famous, attracting attention. It could
be a marketing campaign, but let the
regulatory authorities come out with
proper studies on this
Sudipta Dev, Associate Editor, Express
Hospitality: I understand most Indian
pharma companies are family run
business, but as the industry grows, are
they turning into corporates and
handing over charge to professional
managements?
Yes, there are many examples of
Indian pharma companies becoming
professional and you will not always find
the son of the owner as the CEO. Many
promoters are grooming their children as
their successors if they find them capable,
and in the interim period they are
handing over charge to professional CEOs
who can take the business to another
level. This is good for the company as it
improves the company's image in the
global arena, because today, you cannot
look just at India. You have to consider
other geographies and beyond India,
people are understanding that Indian
entrepreneurs are today hiring
professionals, who sometimes come with
MNC experience.
What are your other interests which
help you unwind?
I listen to music, I am a Hindi film
buff, I like singing Hindi film songs. I've
been a member of the Lions Club for the
last 25 years and a former Governor of the
Mumbai District. I was also the Multiple
Districts PRO and their Bulletin Editor. I
love to swim whenever I get the
opportunity. I go for walks whenever
possible. I do take short vacations with
my family I also spend weekends at
various Institutions that take care of the
blind, the sick, destitutes, orphans etc.
And your family consists of ...
I have one wife (that draws a laugh
from the audience) and two daughters,
who are doing very well. My elder
daughter has done her MMS in Finance
and works for Kotak Mahindra. The
younger one has done an MMS in HR and
works for TCS. Both are experts in their
fields and we find a lot to talk about on
family outings.
Nagesh Joshi, Express Channel
Business: We hear that you were a good
friend of Nadeem of Nadeem-Shravan
fame and in fact have competed with
him in your school days ...
Yes, in fact, we have competed in
various singing competitions and on
some occasions, he has played for me as
I sang. Unfortunately he's had a bad
hiccup and we've lost touch. I wish him
well.
What's next on the agenda at IDMA?
You will all be pleased to know that
IDMA will be entering its Golden Jubilee
Year in 2011. We are planning to celebrate
this occasion in a big way with a number
of new initiatives, as IDMA being
the premier and oldest Association of
small, medium and large pharma
manufacturers, it also signifies the
growth of the National Sector Pharma
industry.
editorial.ep@expressindia.com
August 16-31, 2010