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Create Purpose-Driven-Brands To Win Marketing Warfare In The New Reality

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As we navigate through the Covid days, the hope of somehow getting back to the pre-pandemic normal still lingers – notwithstanding a host of uncertainties in its way. The longing is driven by the hype of availability of scientifically proven, safe and effective drugs and vaccines – unrealistically soon, despite top experts still keeping their fingers crossed. Some are even more forthright in their expression, as reflected in a September 30, 2020 report. It flashed a headline - “There is no getting ‘back to normal. The sooner we accept that, the better.”

Alongside, COVID-19 crisis has also triggered some disruptive changes in the business processes around the world. Amid this global health crisis, interestingly, several global pharma CEOs are sensing a number of game-changing opportunities – having business implications, even much beyond the pandemic.

One such example, as Bloomberg reported on September 29, 2020, the CEO of GlaxoSmithKline Plc feels: The Covid Pandemic is ‘a Shot at Redemption in Pharma Industry.’ Elaborating the point, she said: ‘the sector’s push to find vaccines and drugs to end the crisis, if successful, could change the perception of pharmaceutical companies in the future.’ Coincidentally, the researchers from The Harris Poll found:

  • As of May, 40 percent of the American public said pharma’s reputation had improved since the beginning of the COVID-19 outbreak
  • And 81percent recalled seeing or hearing something about the industry during that time.
  • This is a continuation of the former trend that The Harris Poll first noted on March 2020.

There shouldn’t much doubt, either, that similar general impression on the pharma industry, with a varying degree, may now be felt in most countries, across the globe.

Curiously, flowing from this ‘redemption of pharma reputation’ angle – with new drugs and vaccines, the scope for leveraging another opportunity is also surfacing. This is from pharma ‘branding’ perspective and pertains to creating ‘purpose-driven brands’ for success in the new reality – during the pandemic and much beyond. In this article, I shall focus on the second area, and would start with its relevance to increasingly more informed health care consumers of date.

‘Purpose driven brands’ – attained greater relevance in Covid time:

The concept of creating ‘purpose driven brands,’ is profound – it goes much beyond product features, benefits and intrinsic values. It is motivated by – why the brands exist not just for providing a solution to manage or cure a disease, but also to meet a crucial need in society.

Studies have unfolded, with better stakeholder connection – and greater share of their mind, ‘purpose driven brands’ help improve brand loyalty, resulting into increased revenue and profit. We will see below, why in Covid time, this trend has started gathering wind on its sail, and deserves to find its place at the very core of any pharma branding strategy.

The consulting arm of The Beautiful Truth, also echoed the same sentiment in the article – ‘How Pharma Can Navigate Change With Purpose.’ It reconfirmed, at times of external crisis, like the global pandemic, creation of ‘purpose-driven brands’ is vital. Not just ‘for saving and maintaining business, but also for boosting internal team morale, and reconciling public trust.’

The pandemic has redefined the core purpose of a brand:

Another recent article –‘Through COVID-19, Leading Brands Have Found Their Purpose,’ published in CMO by Adobe, among many others, vindicated this point. Acknowledging that the COVID-19 pandemic has redefined the meaning of brand purpose, the paper explained the reason for the same.

In pre-Covid days, many organizations used to build brands following traditional norms – curing or effectively managing a disease is the purpose of a brand. But, since last few years, a growing number of new generation health care customers expect a brand’s ‘purpose’ to expand beyond the product and the company. It has to be inclusive in nature – benefiting the macro-environment, including governments, health care professionals, and the public. With this expectation gathering momentum during Covid time, pharma players would also need to redefine the core ‘purpose’ of a brand. Incidentally, many pharma CEOs also believe, if this trend continues, the image of the industry would probably undergo a metamorphosis.

Surveys vindicate the rationale for redefinition:

Several top consulting organizations have published excellent articles covering a number of critical points in this area. One such paper - ‘Purpose is everything,’ was published in Deloitte Insights, on October 15, 2019. It wrote on how brands that authentically lead with ‘purpose’ are changing the nature of business today.

The rationale for redefinition of brand purpose, also gets reflected in a contemporary Deloitte survey, as quoted in the above article. It revealed the following top three issues that stakeholders identify with, while making decisions about brands: 

Top Issues

% of respondents
How the company treats its own people/employees

28
How the company treats the environment

20
How the company supports the community in which it operates

19

Aligning purpose to create deeper connections with stakeholders:

Especially at the Covid time, if companies try to align their purpose in doing good – for the society, they can build deeper connections with their stakeholders. And, in turn, amplify the company’s relevance in their stakeholders’ lives. From this perspective, it’s good to note in the above Bloomberg article, that one of the top pharma CEOs articulating the same in public. I reckon, increasingly, pharma businesses would endeavor harnessing the power and opportunity of aligning the ‘core purpose of brands’ with societal good, as came out in the above Deloitte article.

Mostly millennial generation favor ‘purpose-driven’ brands:

The initiation of this trend dates back to pre-Covid time with wider usage of internet. However, with the increasing democratization of health care - social media based instant information sharing, the ability to communicate with others as needed, have increased manifold. Consequently, stakeholders, particularly, the millennial generation with a different mindset, aspirations and expectations are expecting pharma players to act more on the pressing societal issues. This makes them lean towards a purpose driven brands and companies. The unprecedented Covid health crisis is acting as a force multiplier in this area.

Another study – ‘Why Customers Are Supporting ‘Purpose-Driven’ Brands,’ published in Link fluence epitomized this evolving customer preference succinctly. It reiterated, ‘It’s no longer enough for brands to deliver great products and experiences. Instead, consumers are demanding for brands to be more proactive and conscious in delivering value to society as a whole.’

‘Purpose-driven brands’ – the latest ‘marketing buzzword’?

This question was conclusively answered about two years ago -  from the 2018 Cone/Porter Novelli Purpose Study. Although, this survey was conducted in the United States, it has a global relevance amid Covid pandemic. Some of the key findings include: 

  • 78 percent believe companies must do more than just make money; they must positively impact society as well.
  • 77 percent feel a stronger emotional connection to Purpose-driven companies over traditional companies.
  • 66 percent would switch from a product they typically buy, for a new product from a purpose-driven company.
  • 68 percent is more willing to share content with their social networks over that of traditional companies. 

Examples of ‘purpose-driven’ pharma brands/companies:

Let me give just two examples each – from pre-Covid and Covid times. The article – ‘Mission-Drive Pharma Brands,’ published by Wonder on January 15, 2018, cited several examples of ‘purpose-driven’ pharma brands. This was based on a research of individual drug campaigns for top-selling drugs around that time. These include promotional campaigns on:

  • Humira: Highlighted the participation in a community food drive, and volunteering in a playground construction project.
  • Lyrica: Highlighted the engagement in a multi-generational interaction and helping others.

Encouragingly, while combating COVID-19, several pharma companies have also displayed a sense of ‘purpose’ to save the humanity from the pandemic, mainly through collaborative approaches. Let me quote below two such examples:

  • On April 14, 2020 GlaxoSmithKline and Sanofi announced a very unusual collaboration to develop a COVID-19 vaccine, expeditiously. This was done for a greater purpose, responding to the critical need of the society – saving millions of lives.
  • Roche called on and campaigned for the governments for focusing on testing and prevention, to maintain adequate medical supplies for health care professionals  around the world. It also urged the health authorities to work closely with the life sciences industry to tackle the Covid-19 pandemic through international collaboration to tackle Covid-19 pandemic.

Conclusion:

Meanwhile, as on October 04, 2020 morning, India recorded a staggering figure of 6,549,373 of Coronavirus cases with 101,812 deaths. Still there is no respite from Covid-19’s unprecedented onslaught on the country. Be that as it may,  coming back to the creation of ‘purpose-driven brands’ in the Covid time, let me quote again from the above CMO by Adobe article, where it underscored:“Never before have brands been asked to show their true purpose and leadership as they are today. It’s inspiring to see companies across industries and throughout the world come together to address some of the most pressing needs brought about by this crisis.”

As Accenture had articulated: ‘In an era of radical visibility, technology and media have given individuals the power to stand up for their opinions and beliefs on a grand scale.’ Keeping this in view, with gradually changing stakeholder mindset and expectations, the ‘purpose of a brand’ deserves to be a critical centerpiece in the pharma ‘branding’ process. Various studies have established – since pre-Covid time, and more during this pandemic – brands, reflecting a robust sense of ‘purpose’ on societal values, people and the environment, connect better with customers.

Consequently, as the stakeholders find these companies walk the talk, they develop a strong and sustainable brand preference, and reward the manufacturers commensurately, both directly and also through word of mouth. Alternatively, if the stated ‘brand purpose’ is not genuine – which customers can quickly find out through digital transparency, they shift their preferences to the deserving ones. Going by this growing trend, I reckon, creating ‘Purpose-Driven-Brands’ assumes a critical importance to win marketing warfare, in the new reality.

By: Tapan J. Ray    

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

What Pays More: Creating ‘Innovative ‘Customer Experience’ Or ‘Innovative Drugs’?

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More innovative a drug is, the better is its business success rate. This was the general perception of around 92 percent pharma professionals in the past three years. Whereas the fact is: ‘Having the best product doesn’t guarantee sales anymore’. This was established by a research study of the ‘Bain & Company’ - covering multiple therapeutic areas, and was published on October 14, 2019.

It showed, when physicians prescribe a drug – its efficacy, safety and side-effect profile initially account for only 50 percent to 60 percent of the physician’s choice, with a declining trend over time. Interestingly, the other 40 percent to 50 percent of it, is based on a range of ‘physician and patient experience factors’, which pharma players need to target in innovative ways to differentiate their brands.

Many pharma companies are now experiencing the harsh reality that more innovative drugs, backed by traditional sales and marketing support are not yielding desirable financial returns. Head scratching has already started among astute pharma professionals to understand its reason for remedial measures. Thus, the number of executives who agreed with the above ‘Bain & Co’ study that: ‘Having the best product doesn’t guarantee sales anymore,’ increased to almost fourfold – from 8 percent to 28 percent in the next three years.

Thus, in this article, I shall explore whether innovation in creating a ‘unique patient experience’ during a disease treatment process, is as important, if not more than a ‘new drug innovation’. Curiously, high failure rate of most pharma players to innovate in this area, isn’t discussed as much as high failure rates in the development of innovative new drugs.

‘Customer service’ innovation – high failure rate – falling short of expectations:

Again, another article - ‘How Agile Is Powering Healthcare Innovation,’ published by ‘Bain & Company’ on June 20, 2019, brought out some interesting points related to this area. Let me quote a few of which as follows:

  • 65 percent of ‘customer-service innovation’ fall short of expectations of the target group.
  • The number of health care executives recognizing the need to respond quickly to changing customer-needs, has increased from 38 percent in the past three years to 60 percent for the next 3 years. But, most of them ‘lack the methodology, and even the language to implement it in practice.’
  • ‘Having the best product doesn’t guarantee sales anymore.’ Thus, healthcare companies face growing pressure to innovate in providing unique ‘customer experience’.
  • The critical point to note, customer needs evolve continuously, and leading companies respond rapidly with innovative new solutions catering to changing market demand.

As the core purpose of working for ‘customer-service innovation’ is linked with creating ‘brand loyalty’, let’s have a quick recap on ‘brand loyalty’ really means for pharmaceutical products, in today’s context.

‘Brand loyalty’ for pharmaceutical products in modern times:

There are many similar definitions of ‘brand loyalty’ for a pharmaceutical product. The research article – ‘Brand Loyalty as a Strategy for the Competition with Generic Drugs: Physicians Perspective,’ published in the Journal of Developing Drugs, on August 30, 2016, defined ‘brand loyalty,’ and articulated its advantages.‘ I am paraphrasing a few of which, as below:

  • The extent of the faithfulness to a particular brand, which is a major indicator of a long-term financial performance of companies.
  • The main advantages of brand loyalty can be defined as greater sales and revenue, a substantial entry barrier to competitors, increase in a company’s ability to respond to competitive threats and lower consumer price sensitivity.
  • ‘Brand loyalty’ can protect against price competition, including branded generics, as it gives confidence to physicians on the perceived effectiveness and safety of a brand – which they usually won’t be willing to compromise with for lower prices.

This brings us to a key question. Are traditional pharma methods of creating ‘brand loyalty’ getting replaced by the key consideration of creating a ‘unique customer experience’?

Creating ‘brand loyalty’ through ‘patient loyalty’ – a new equation:

It’s a fact today that traditional pharma methods of creating ‘brand loyalty’ is getting replaced by the key consideration of creating a ‘unique customer experience.’ This, in turn, is increasing the need of building ‘patient loyalty’, both for a pharma brand, as well as respective companies offering these brands. This is a new equation, where offering a ‘unique treatment experience’ to patients assumes a critical role more than ever before. This needs to be clearly understood by today’s pharma marketer, without any ambiguity.

In traditional pharma marketing, physicians remain, virtually, the sole focus of the branding exercise, as they appear to be the only decision makers of writing a brand prescription. Patients, in general, hardly used to have any role to play in that process. In this scenario, brand loyalty for the doctors – assuming the absence of any malpractices, is primarily driven by the following three much known factors:

  • Physicians’ unprejudiced buying-in a brand’s value offerings
  • Evaluation of opinion leaders and the doctors’ professional counterparts,
  • Quality of disease treatment outcomes.

Nevertheless, before getting into this area, let’s have a quick look at the primary drivers that pharma marketers have been using to boost financial performance of a brand.

Traditional sales boosters of a pharma brand:

The primary drivers that pharma marketers have been using to boost financial performance of a brand can broadly be classified as follows:

  • Multiple ways are followed to make important doctors write more prescriptions,
  • Increase the drug price, whenever an opportunity arises.

These factors still remain important, but aren’t just enough to deliver sustainable performance over a period of time. Thus, a new dimension needs to be added to it.

Add a new dimension to create brand and corporate loyalty:

With the emergence of increasingly more informed and demanding patients, there is a need to create a ‘loyal patient population’, by offering them primarily a ‘unique treatment experience’. And this is the new dimension.

For this purpose, off-the cuff approaches or strategies based on mere gut-feelings are unlikely to work. As I indicated in one of my articles, marketers need to acquire deep insights on their customers to make sales and marketing decisions more informed, than what it is today. Currently available state of the art technology can be a great enabler to facilitate this process.

This is easier said than done, because answering the question – how does a drug company create ‘brand loyalty’, is indeed a tough call. Nonetheless, many different industries have realized, since long, that offering a ‘unique customer experience’, is critical to create a pool of ‘loyal customers’.

I also had written earlier, pharma is still a late learner in accepting various new normal, in a holistic way. Accepting this reality, a sharp focus on creating ‘brand loyal doctors’ in various innovative ways, I reckon, will serve this purpose well. It’s only recently, a few companies have started working to offer such ‘experience’ to patients in the disease treatment process - end-to-end. Ironically, a large majority of them prefer to talk about it more than actually translating the same into reality.

Benefits of ‘brand loyalty’ through ‘unique customer experience’:

There are several advantages of building pharma ‘brand loyalty’ by offering ‘unique customer experience, without diluting the focus on ‘increasing prescription generation through doctors’. The benefits, I reckon, include, both new – innovative products and also branded generics. Let me give below one example of each:

  • Innovative new-products – positive word-of-mouth promotion: Satisfied patients having ‘unique end-to-end treatment experience’ with a new, innovative brand, are very likely to share it with others. This may be done by using different modes of communication, including various social-media platforms. This, in turn, may help both – add to take-off speed – post launch and create a snowballing impact on the brand adoption thereafter.
  • Branded generics – extend the product life cycle and increase growth: Patients who are loyal to a particular branded version of a generic molecule, are quite likely to refuse any change to a cheaper equivalent, even if recommended by the physician. Moreover, they will advocate for this brand to others, using different communication platforms, as indicated above. Continuation of this process will extend the life cycle of the branded-generic, with increasing growth and market share.

Conclusion:

Now, it’s time to get back to what we started with - What pays more: Creating ‘Innovative ‘Customer Experience’ Or ‘Innovative Drug?’ From the above perspective, it emerges that bringing innovative product to markets is, of course important. However, to ensure its sustainable financial success, other innovations, such as creating ‘a unique end-to-end patient experience’ with the brand, in all probability, would weigh more. This is an area which did not receive much attention for a long time, moving beyond the creation of increasing numbers of ‘brand loyal’ doctors, for business success.

Today, increasing consumerism in the health care space, besides pricing pressure, unfavorable perception and sinking image of the industry, is creating a strong headwind – impeding desirable growth of many pharma players. Such a challenging business scenario has prompted a few of them to innovate in designing a differentiated ‘customer experience’ – in a true sense.

Although, a large number of companies are talking about it, most are mere lip-services – a ground-swell in this area is yet to take place. The industry priority, in general, still weighs heavily in developing innovative products, and creating ‘brand loyal’ doctors, rather than cultivating ‘brand loyal patients’, alongside.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Creating Satisfied Patients Begins With Developing Satisfied Employees

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‘The core issue in health care is the value of health care delivered,’ wrote Michael Porter in a paper titled, ‘Value-Based Health Care Delivery,’ published by the Institute of Strategy & Competitiveness of Harvard Business School (ISC-HBS) on January 15, 2014.

Building on this concept, EY in its 2018 edition of ‘New horizons: Executive insights on the future of health’ articulated: ‘Value-driven care means delivering the best clinical outcomes with optimized costs, while delivering a satisfying experience for patients and providers.’

Creating a ‘satisfying patient experience’ – or ‘satisfied patients’ for its brands, being the ultimate objective of a drug company, I shall add an interesting dimension to it, in this article. And that is: Will it necessitate creating satisfying employees within the organization to achieve this goal? To build a right perspective in this direction, let me begin with the core concept of Michael Porter on this subject. This starts with – what is generally regarded as ultimate ‘value’ to patients, in healthcare delivery?

Defining ultimate ‘value’ in health care delivery:

Porter defined this ‘value’ as ‘patient health outcomes per dollar spent’. He also made some key assertions in this context, which I am summarizing below:

  • Delivering high and improving value is the fundamental purposeof health care.
  • Value is the only goal that can unite the interestsof all system participants.
  • Creating positive-sum competition on value for patients is fundamental to health care reform in every country.

Are these assertions attainable?

To create ‘Value-Based Health Care Delivery (VBH),’ the people would also need a ‘Value-Based Pharma Industry (VBP)’, delivering ‘Value-Based Medicine (VBM)’, for all. The three key principles for any VBM are considered as follows:

  • Thoroughly selected values must be based on the best research evidence available and applied as treatment options. 
  • Values for patients are converted into measurable utility values to facilitate the integration.
  • The cost-utility level expected from selecting a particular treatment option is the basis for decision-making.

In other words, the whole purpose of offering a VBM is to provide cost effective, science-based healthcare that incorporates patient values. Nonetheless, effective implementation of both VBH and VBM would entail a radically different leadership mindset, with quite a different set of success requirements, both globally and locally.

To drive home this point, let me illustrate just the third point of the Porter’s model of VBH, as quoted above. This clearly articulates: ‘Creating positive-sum competition on value for patients is fundamental to health care reform in every country.’ But the current reality of ‘competition’ in the drug industry is far from what it should be, as evident from one of the Brookings studies.

How competitive is the pharma industry to reduce cost of health care?

The Brookings paper titled, ‘Enabling competition in pharmaceutical markets,’ published on May 02, 2017 shares its research findings on the subject, which in a broader context include the following points:

  • Over the years, industry participants have managed to disable many of the competitive mechanisms and create niches in which drugs can be sold with little to no competition.
  • When manufacturers can earn high profits by lobbying for regulations that weaken competition, or by developing mechanisms to sidestep competition – the system no longer incentivizes the invention of valuable drugs – incentivizes firms to locate regulatory niches where they are safe from competition on the merits with rivals.
  • But, health care system performs well when competitive forces are strong, yielding low prices for consumers, as well as innovation that they value.
  • Weak competitive forces often lead to a lack of market discipline with high drug prices and are more damaging to in the pharma consumers than some other sectors.
  • Without strong competitive conditions, healthcare expenditure will continue to grow, inviting public demand for drug price regulation through legislation.

These findings provide enough reasons to ponder how to overcome the barrier of ‘Creating positive-sum competition on value for patients’ to move towards VBH.

The good news is, VBH concept was soon put to use:

The good news is, soon after publication of Michael Porter’s paper – ‘Value-Based Health Care Delivery’ by (ISC-HBS) on January 15, 2014, it was put to practice by the American College of Cardiology (ACC).The article titled, ‘A New Era of Value-Driven Pharmaceuticals’, published by Health Standards on May 21, 2014, reported it.

The article wrote, at the end of March, the American College of Cardiology (ACC) and the American Heart Association (AHA) issued a joint statement saying they “will begin to include value assessments when developing guidelines and performance measures (for pharmaceuticals), in recognition of accelerating health care costs and the need for care to be of value to patients.”

The authors pondered, ‘are we entering a new era of value-based medications or value-driven pharma?’ There are several such reports. For example, another article titled, ‘Value-based healthcare’, published by the ‘Centre for Evidence-Based Medicine (CEBM)’ observed, value-based healthcare has emerged as a field of its own – feet firmly founded in ‘Evidence-based Medicine’ or ‘Value-Based-Medicine.

VBH concept is slowly gaining acceptance:

EY in its 2018 edition of ‘New horizons: Executive insights on the future of health’ also reiterated this point. The paper mentioned, ‘the trends of reducing costs and improving outcomes show no sign of receding, and new models for delivering health care are only adding pressure to traditional brick and mortar facilities.’ It further highlighted, some pharma companies have started systematically reviewing the business processes, procedure and patient interface within the organization to identify and eliminate waste and inefficiency.

But, still a lot of ground to cover:

In this regard, EY Health Advisory Survey 2017 came out with several interesting findings based on the responses of 700 qualified healthcare professionals. One such finding is, although high importance is attributed to creating both – a good ‘patient experience’ and a meaningful ‘patient engagement’, but a lot less is done on the ground. This was supported by the following data:

  • 93 percent of respondents reported, they are undertaking ‘patient experience’ initiative that year, but only 26 percent of them selected patient access or satisfaction as one of the top three for the same.
  • Although 81 percent of the professionals said ‘patient engagement’ is considerably important to them, but most of the top initiatives undertaken by their organizations don’t directly involve soliciting and analyzing patients’ needs and wants.

‘Employees satisfaction’ a prerequisite for ‘patient satisfaction’:

The same EY Health Advisory Survey 2017, found many respondents articulating that ‘employee satisfaction’ is a prerequisite to ‘patient satisfaction’. However, its importance gets diluted whiling translating the same into reality, as vindicated by the following finding:

  • 51 percent of respondents believe that employee satisfaction in health care drives patient satisfaction, but only 35 percent said that their organizations have already initiatives underway to create more positive work and environment. Interestingly, only 10 percent of them have undertaken any employee satisfaction survey soliciting employee input.

It is quite apparent from this situation that leaders of respective organizations don’t walk the talk, especially in this critical area. Harmonization of ‘patient satisfaction’ as a critical success factor for delivering VBH, with the core business value of the company, is not taking place. A deep-rooted belief that success in developing mostly transactional and partly emotional relationship with the heavy prescribers is the only ‘magic wand’ for business success in pharma. Thus, the old habits die hard, even today.

Conclusion:

Despite several barriers in its way, for a long-term survival in business, hopefully, many pharma companies would willy-nilly move towards delivering ‘value-based health care’ through ‘value-based medicine.’ This would necessitate having a clear goal to create an increasing number of satisfied patients for the brands. There are ample evidences today that ‘employee satisfaction’ is a basic prerequisite to ‘patient satisfaction’, where many drug companies are lagging behind, significantly.

Only the movers and shakers in the senior leadership of pharma industry can break this status-quo. It may be initiated with – example-setting activities, which should enable giving shape to developing a set of standard operating procedure – culminating into the culture and value for the organization.

Nurturing humane approach to employee commitment for creating satisfied employees is the primary step of this important initiative. Then, encouraging their active participation – willingly, to bring patients at the center stage of pharma business, should be the ongoing process.  It’s, therefore, imperative to note - the goal of creating ‘satisfied patients’, should always begin with developing ‘satisfied employees.’

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Biosimilars: Creating new vistas of opportunities for Indian Bio Pharmaceutical players in the global market.

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Biosimilar or follow-on biologic drugs market is fast evolving across the world with varying degree of pace and stages of developments. The global market for Bio-pharmaceuticals was around US$ 120 billion in 2008, as reported by IMS. However, total turnover of Biosimilar drugs in the regulated markets during the same period was just US$ 60 million.

Currently about 25% of New Molecular Entities (NMEs) under development are of biotech origin. Indian pharmaceutical majors like Dr. Reddy’s Laboratories (DRL), Reliance Life Science, Shantha Biotech, Ranbaxy, Biocon, Wockhardt and Glenmark have made good investments in biotech drugs manufacturing facilities keeping an eye on the emerging opportunities with Biosimilar drugs in the developed markets of the world.

International Scenario:

Internationally most known companies in the Biosimilar drugs space are Teva, Stada, Hospira and Sandoz.

The first R&D focused global pharmaceutical company that expressed interest in this space is Merck & Co. In December 2008 Merck announced creation of ‘Merck Bio Venture’ for this purpose with an investment commitment of around US$ 1.5 billion by 2015.

Other large research based global innovator pharmaceutical companies, which so far have expressed interest in the field of Biosimilar drugs are Pfizer, Astra Zeneca and Eli Lilly.

Future market Potential:

IMS Health, July 2009 reports that only in the US from 2009 to 2013 about 8 major biologic products like for example, Enbrel (Amgen/J&J), Lovenox (Sanofi-Aventis), Zoladex (AstraZeneca), Mabthera (Roche), Humalog (Eli Lilly) and Novorapid (Novo Nordisk) are expected to go off patent. The sum total of revenue from these drugs will be over U.S$ 15 billion.

This throws open immense opportunities for the Indian companies working on Biosimilar drug development initiatives.

Regulatory pathway for Biosimilar drugs:

Currently EU is the largest Biosimilar market in the world. Immense healthcare cost containment pressure together with a large number of high value biologics going off patent during next five years, especially in the developed western markets like US and EU, are creating a new vista of opportunities in this field to the potential players.

Regulatory pathway for Biosimilar drugs exists in the European Union (EU) since 2005. In the USA President Barak Obama administration has already expressed its clear intention to have similar pathway established in the country through the US-FDA, which is expected to come by 2010.

Steps taken by the Indian pharmaceutical companies towards this direction:

Biosimilar version of Rituxan (Rituximab) of Roche used in the treatment of Non-Hodgkin’s lymphoma has already been developed by DRL in India. Last year Rituxan clocked a turnover of over US$ 2 billion. DRL also has developed filgastrim of Amgen, which enhances production of white blood-cell by the body, and markets the product as Grafeel in India. Similarly Ranbaxy has collaborated with Zenotech Laboratories to manufacture G-CSF. Meanwhile Biocon of Bangalore has commenced clinical trial of Insugen for the regulated markets like EU.

On the other hand Glenmark is planning to come out with its first biotech product by 2010 from its biological research establishment located in Switzerland.

Within Biopharmaceuticals the focus is on Oncology:

Within Biopharmaceuticals many of these domestic Indian pharmaceutical companies are targeting Oncology disease area, which is estimated to be the largest segment with a value turnover of over US$ 55 billion by 2010 growing over 17%. As per recent reports about 8 million deaths take place all over the world per year due to cancer. May be for this reason the research pipeline of NMEs is dominated by oncology with global pharmaceutical majors’ sharp R&D focus and research spend on this particular therapy area. About 50 NMEs for the treatment of cancer are expected to be launched in the global markets by 2015.

Indian market for oncology products:

Current size of the Indian oncology market is around US$ 18.6 million, which is expected to be over US$ 50 million by the end of 2010; the main reason being all these are and will be very expensive products. Biocon has just launched its monoclonal antibody based drug BIOMAb-EGFR for treating solid tumours with an eye to introduce this product in the western markets, as soon as they can get regulatory approval from these countries. Similarly, Ranbaxy with its strategic collaboration with Zenotech Laboratories is planning to market oncology products in various markets of the world like Brazil, Mexico, CIS and Russia.

Conclusion:

As the R&D based global innovator companies are now expanding into the Biosimilar space, many Indian domestic pharmaceutical companies are also poised to leverage their R&D initiatives on Biosimilars drugs development to fully encash the emerging global opportunities in this space. It is quite prudent for the Indian players to focus on the Oncology therapy area, as it is now the fastest growing segment in the global pharmaceutical industry.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.