For the first time in over two decades, India’s pharma industry has barely had time to dust itself off from one crushing US FDA regulatory blow before another one was at hand. Almost all top 10-15 companies have had bans or third party audits slapped on their manufacturing plants. The collective impact has been devastating; to financials, the image of these companies and morale. The pharma index has slipped 18.3% since April last year, the first time in many years.

In the other emerging markets, which is the next big opportunity for Indian drug makers, countries like Russia and Venezuela have been battling economic crisis. Others, like Turkey, Brazil, and Mexico now insist on local manufacturing and technology transfer.

It’s that time of the year when the chickens are coming home to roost.

The quarterly result season is upon us. The post result analysis has been prescriptive for listed pharma companies, many of whom have had an awful run at the stock market so far. In a quiet disclosure to analysts last month, Lupin said it had added nearly a 1000 people to its field force, taking the total count to 5500. Another large pharma company is going to make a similar hiring announcement in the next quarter, say sources.

But wait.

But why?

Did we not get to understand, just a few years ago, that most Indian pharma companies were cutting down medical representative hiring and “adopting technology to minimize the cost of marketing and promotion”? Whatever happened to that?

Did we not get to understand, just a few years ago, that  most Indian pharma companies were cutting down medical representative hiring and “adopting technology to minimize the cost of marketing and promotion”? Whatever happened to that?

I guess desperate times call for desperate measures.

The spotlight is back on India. “Expect more Indian companies to invest in India because they are getting battered in the regulated market where price erosion is likely to reach low double digit from high single digit,” says an analyst with an international brokerage firm in Mumbai.

Too many cooks

Let’s back up a little.

In 2012, in the midst of a conversation at Cipla headquarters in Mumbai, Yusuf K Hamied, the affable chairman, blurted: “Most companies have already abandoned India…the government is pushing us out”. That year, Cipla’s revenue from exports was nearly 50%. By 2016, Hamied predicted it would go up to 75%.

Instead, exports only grew to 55% this year.

Cipla under Hamied was conservative in global expansion. But others were not.

Starting mid-1990s, in the first wave of entering regulated markets, Ranbaxy, Dr Reddy’s, Sun Pharma and Lupin entered the US generic market, which until then was dominated by companies like Teva, Mylan, Actavis and Sandoz.

AUTHOR

Seema Singh

Seema has over two decades of experience in journalism. Before starting The Ken, Seema wrote “Myth Breaker: Kiran Mazumdar-Shaw and the Story of Indian Biotech”, published by HarperCollins in May 2016. Prior to that, she was a senior editor and bureau chief for Bangalore with Forbes India, and before that she wrote for Mint. Seema has written for numerous international publications like IEEE-Spectrum, New Scientist, Cell and Newsweek. Seema is a Knight Science Journalism Fellow from the Massachusetts Institute of Technology and a MacArthur Foundation Research Grantee.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?

MOST POPULAR

Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750

Subscribe
 

Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500

Subscribe
MOST POPULAR

Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120

Subscribe
 

Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

$ 20

Subscribe

Questions?

What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at [email protected] detailing the error or queries.