Pharma in India and challenges MNCs face

 

Executives from foreign multi-national companies (MNCs) in India have often compared themselves to boxers entering the ring with one hand and one leg tied and a blindfold on their eyes, to take on a heavyweight champion. While this is definitely an exaggeration, it attempts to underscore the feeling of competing in a market which is not perceived to be a level playing field. While they are entitled to their emotional outbursts, a more rationale look reveals a slightly different reason to be upset, if at all.

Product – Are MNC portfolios truly aligned to the needs of the Indian patient? Or are they more aligned with their parent organizations?

Price – While MNC executives complain about having to price their products premium, they seldom complain about a lack of passion in their marketing, to explain that premium price to patients. And if patients, at the end of the day, consider every white pill the same, then should they be blamed? Of course, there is the odd value creating campaign which creates the odd blockbuster, but then this is more an exception than the rule.

Promotion – Complain about Indian company driven “CRM” here as much as you will, but the fact is that it is only the rare MNC marketing program that really leaves a mark with HCPs and patients.

Place – The complex distribution system in India does mean that a lot of value stays locked in. The system stays complex because of the unionized nature of the people who control it. Despite their global clout and expertise in negotiating with large purchasers in the developed world, MNCs do precious little to bring in that expertise into India. Until the pharma lobby in India has different faces representing MNCs and domestic companies, one can expect precious little to change.

Overall, in more cases than in fewer, MNCs treat India as just a market and rarely place a premium on its development and progress. Older executives I have interacted with, speak wistfully about the 70s, 80s and even the 90s when they had “more freedom” to align portfolios and prices for the Indian patient.

The question to answer then would be, is aligning with parent organizations – and the reduced leverage that offers – a far larger challenge than what MNCs are willing to admit?

Excerpted from an article published in the February 2017 issue of MedicinMan

 

 

One thought on “Pharma in India and challenges MNCs face

  1. Salil, as usual your articles are very incisive and thought provoking. The Capabilities needed in organisations today need to address these very internal and external challenges mentioned so lucidly by you!

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s