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A New Prescription For...

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In a departure from its current strategy of focusing on a clutch of brands from its UK-based parent AstraZeneca’s stable in areas such as asthma and critical care, AstraZeneca Pharma India will launch a slew of branded generics — off-patent drugs not discovered or developed by the parent — to widen its reach in the Rs 34,000-crore Indian pharma market.

The market response to the move will be watched eagerly by other MNC drug firms. The Bangalore-based Rs 355-crore Indian subsidiary is likely to introduce about 40 such products, though the branded generics manufacturing will be outsourced. “The company is keen on widening its market reach, and believes this can be done through the launch of branded generics,” says one distributor who is privy to the plan. This will also help create a wider base for future patented drug launches. The distributor says AstraZeneca is ramping up its sales team by 600 people to hawk these drugs to doctors.

“In order to continue growing faster than the market, we will be looking at launching AstraZeneca’s global (products) as well as products aimed at the Indian market,” the company writes in an e-mail response to BW. “We are also looking at significant expansion of field force to support our growth strategy.”

For multinationals such as the $31-billion AstraZeneca, emerging markets such as China and India hold out prospects of faster growth rates than western ones stuck at low single digits. In China, where AstraZeneca has made major investments, the company closed 2008 with revenues of $627 million.

But strategies for these markets have to be tailor-made. The Indian pharma market grew 13.4 per cent between February 2008 and January 2009, according to market research firm ORG-IMS. But this pace is still driven by generics as India’s drug patent laws kicked in only in 2005.

AstraZeneca’s move seems to be a response to this business reality.

(Businessworld Issue Dated 10-16 March 2009)

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