Finding the new normal

Two global pharma CEOs, two years apart, making essentially the same sounds. That, in a nutshell, is the paradox presented by the India market. Tantalisingly huge to resist, but a tough one to crack.

Andrew Witty, GSK’s global CEO had exhorted his colleagues to “get the balance right” at OPPI’s 45th AGM in 2011 (See report: ‘We must get the balance right: Witty at OPPI AGM’, Express Pharma Oct 16-31, 2011: http://pharma.financialexpress.com/ 20111031/market18.shtml) “Is the industry intelligent enough to contribute rather than conflict with the government?,” he asked. “We have to think long term and recognise that many people are required for the solution,” he said.

And at this year’s OPPI AGM, Sanofi CEO, Chris Viehbacher made essentially the same point on the perception of the global pharma industry when he said, “We have an obligation to go beyond other businesses and have to be an exemplar of ethics and compliance.”

Viehbacher’s company does have a long history in India, and he pointed out to the acquisition of and investment in Shantha Biotech as proof that Sanofi does not have a “colonial” mindset towards India. He was making the point that the Government’s cautious stance on foreign direct investment (FDI) curtails such deals, to the detriment of corporates, global and local, as well as patients. Praising the achievements of Shantha Biotech’s founder, Dr Varaprasad Reddy, also seated in the audience, he said his company’s interest was to realise Dr Reddy’s vision of supplying affordable high quality vaccines to the children of India as well as the world.

In essence, both global CEOs were underlining the natural symbiosis between global and local companies to serve patients at both levels. But issues like India’s FDI policy and IP laws have both sides worried. “If in the long term we have to thrive, in the short term we must survive,” stressed Viehbacher. He did go on to add that he would not evaluate a country on the short term and wouldn’t make the mistake of betting against (India’s) demography. Indeed, Sanofi is rumoured to be close to buying Elder Pharma’s domestic formulation business. He seemed to advocate more efforts to change public perceptions, saying, “We must demonstrate that patents are not a block to greater access.”

Arguments to increase FDI in Indian pharma, tone down IP laws or ease up on the clinical trials industry will continue. (See cover story in this issue: Clinical trials in India: The churn continues). The new price control regime is also a sore point with the industry. But given the Government’s stance so far, it looks like the industry will have to find a way to cope with the new normal.

Viveka Roychowdhury
Editor

viveka.r@expressindia.com

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