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In Capex alone we will be investing around Rs 250 crores this year

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USV, a 55-year old pharma company recently announced  regulatory submission of proposed biosimilar Pegfilgrastim and acceptance for review by EMA. Prashant Tewari, MD, USV, divulged his company growth plans in 2018 and more

How will 2018 be for the pharma industry?

Prashant Tewari

2018 should be better for the pharma industry than the last year. GST is stable in pharma now. In 2017, there was some impact on the bottom line for everybody because the delta over the earlier excise duty/ VAT regime is about 2.5 per cent. So, some reduction in their sales has happened to every company. However, all this is behind us and 2018 should be better.

Yes, there could be some adverse impact for pharma majors with substantial international exposure. Our exposure is not large so the impact is less. So far we have had a very niche portfolio. Our business in the US is around $25 billion.

What are USV’s plans for the coming year?

USV’s 80 per cent of business is in India but we are looking at expanding in the global markets. We have 16 ANDAs approved, and 40 more awaiting approval. However, we have received a warning letter for our Daman facility. We will receive approvals only after that is lifted.

India remains our major focus. It is a big market for us, we are leaders in diabetes, cardiovascular segments. These segments have potential for good growth as well. We have some pipeline projects for India, they are more mid-term/ long-term plans. We are working on an anti-cancer vaccine, the clinical trials will tell us about our progress on this front.

You have recently applied for marketing authorisation application for a biosimilar in Europe, is that also a focus area?

In India we are not looking at biosimilars, we are looking at US and Europe for this segment. It is a lucrative space but also tough in terms of investments. It is very different game from generics. Biosimilars will be the driver for our international business. We have filed for European Union and we are also doing the additional clinical trials which are necessary to help us enter the US market as well.

So, what are the investments planned by USV in this year?

In capex alone we will be investing around Rs 250 crores in a new plant for capacity enhancement. We will be investing it in a new facility near Baroda. We already have possession of that land, the plant which will come up will have a lot of modern automation technology so a lot of investment will go into it. The other investments will go for Pegfilgrastim, the cancer vaccine and their clinical studies.

Many Indian pharma companies are facing US FDA warnings. So, why hasn’t the industry come together to tackle this challenge?

Actually, it is not an industry issue but a company-specific issue from the US FDA perspective. But, of course the industry has come together on a quality platform. It is trying to make sure that a common approach is taken towards quality. For instance, Indian Pharmaceutical Alliance (IPA) has engaged McKinsey to do some major work on quality transformation. So that is ongoing but the challenge is in translating it into large companies, multiple sites and building a culture of compliance. Companies need to understand that to ensure compliance if business needs to take a back seat then it has to. It is necessary for long term benefits and growth.

So, are Indian companies ready/ inclined to make this change?

Yes, absolutely. Indian companies have made tremendous progress in this direction. Talking about us, we have also made substantial changes. We track our own metrics internally. These are simple metrics that the US FDA also tracks. Basically, it is about strengthening your existing systems which are in place and ensuring that these systems are followed. And right from the top management, everyone has to be engaged in ensuring quality totally. We have a quarterly quality review meetings for the whole company, we look at all the quality events that take place. All the complaints, deviations or specifications etc. are reviewed. By doing this, we give out a strong message to everyone in the company that quality is a top priority. Monitoring and investigation is also important because quality is not just the final product, it is quality through the process. These are fundamental subsystems of the quality system which need to be strengthened through training and education to ensure that your teams are aligned to the quality goals of the company.

Which events will shape the industry in India?

In India, the only downside is NLEM but it is part of the game. We, at USV, don’t complain about it. The other thing is if generic prescribing comes into being, things will change.  But, now they are rethinking about it and may enforce it only for simple products, Class I products. It is better that way. All our products are from the past, so it is better if it doesn’t get enforced for difficult compounds.

How is technology changing the game in the pharma sector? Is the pharma industry resistant to technology adoption?

In the pharma industry, technology has two aspects: manufacturing and analytical. The pharma sector has already adopted technology on the analytical end as testing is very large and complex in pharma. Now we are seeing rapid adoption in the manufacturing side as well as it automates the processes and reduces chances of human error. Technology has several benefits and can help improve compliance but the cost is often a deterrent, especially for generics manufacturers. The technologies have a price, but if your product is a Rs 1 tablet then it is going to be an issue.

But, isn’t innovation the way forward?

Everybody is innovating in some way or the other. Innovation is a continuum. Most countries have gone through this continuum, some of them have made it to a level where innovation is an integral part of their culture. We are also going through it and we have made considerable progress on this path. But, there is also a risk involved. Therefore, every company is taking the risk they can handle. So, it depends on their size, their balance sheets. In innovation, the other side of the coin is risk.

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