Pfizer plans major push into genericsPfizer Ltd, the Indian subsidiary of the world’s largest drug maker Pfizer Inc., is making an aggressive play in the Indian generics or off-patent drugs market.

The Indian arm of the world’s top drug firm hopes the generic portfolio will boost its revenue once it succeeds in semi-urban and rural markets.

It has already launched a widely prescribed hypertension drug telmisartan under the brand name Targit, and will launch at least three more generics by December, a senior executive said.

Pfizer Ltd, which has been in India for at least five decades and is the 12th largest pharma company in the country by sales revenue, has expanded its field force by 220 people over the past few months for this business and identified several top-selling Indian generic drugs of which it will launch versions, the executive mentioned earlier said. He did not want to be identified as the company has not yet made a public announcement.
A Pfizer (India) spokesperson confirmed the development and said that the plan was in line “with the global strategy”.

“Pfizer India is actively looking at leveraging this (growing Indian market) opportunity by offering quality branded value offerings at a competitive price,” she said, adding that the drugs in the project would address both chronic and infectious diseases.
Telmisartan is currently marketed by at least 20 domestic drug makers, including Glenmark Pharmaceuticals Ltd, Sun Pharmaceutical Industries Ltd, Cipla Ltd, and Ranbaxy Laboratories Ltd.
The project, internally named branded value offerings, will see the company challenging local rivals such as Ranbaxy, Cipla, Sun Pharma, Piramal Healthcare Ltd, among others, whose primary business comes from generics.
It is also a radical shift for Pfizer from its traditional business model of being an original and speciality pharmaceuticals manufacturer.

Generics represent one of the fastest growth segments in the global pharmaceuticals market. This is particularly true in emerging markets where costs and access are primary drivers of growth.

The Indian pharma market, driven largely by generics, has been growing at 14-15% over the past four years.
Pfizer grew by 12% in 2008 and ended the year with revenue of Rs704 crore. The company follows a December-November fiscal year.
Earlier this year, Pfizer Ltd had to cede control of at least four over-the-counter drugs, which are sold without a doctor’s prescription, to the local arm of Johnson and Johnson Inc. after an agreement between the parents of the two companies.

Pfizer’s thinking is that the generic drug portfolio will help it boost revenue once it manages to succeed in semi-urban and rural markets with its competitive pricing.

A readily available market, no additional research cost, and its reputation among the doctors and the trade as a quality brand company are also expected to help the company in this effort, the executive added.


The News

Branded value offerings to address India’s low-price, big-volume drug market, in line with parent’s new established products business unit.

The Background

Aims to become maker of cheap drugs with broad product portfolio through capabilities in reformulations.

The Implication

Sparks new competition in India’s Rs. 55,000 crore cheap copy drug markets growing at 14-15% a year.

Analysts and industry officials are more guarded in their reactions. A senior executive at a leading domestic generics manufacturer said, “It’s too early to get into a conclusion whether Pfizer’s move (will) make significant difference in the market, though any new brand in the generic market is a threat to the existing players.” He did not want to be identified as he is a senior manager with a firm that will now compete directly with Pfizer’s generics business.

Kirit Gogri, a Mumbai-based analyst with brokerage Quant Capital, said that Pfizer’s generic push will “not make a significant impact on the competitors immediately because it may take longer for new products to get established”.

Another Mumbai-based industry analyst with a foreign brokerage said Pfizer’s “doctor and trade detailing model” to push these products would definitely pose a threat to small and medium players. This analyst didn’t want to be identified.

“Doctor and trade detailing” is a strategy in which firms such as Pfizer promote their products through endorsements by doctors, achieved through scientific detailing. The same approach is followed in the sales channel, unlike many generic drug makers who push sales through incentives such as price discounts.
Pfizer Inc. in May had announced a licensing agreements with two Indian pharma ingredient manufacturers— Aurobindo Pharma Ltd and Claris Life Sciences Pvt. Ltd— strengthening its position in emerging markets and expanding its portfolio of products through a new business division, named established products business unit. The Indian company will also likely benefit from these deals.

“We believe that the key factors that are required to succeed and grow share in this market are: strong brands; well trained field force; reaching customers effectively and a track record for quality products. We have a clear plan to leverage these strengths and gain competitive advantage,” the Pfizer spokesperson added.