‘Us and them’ approach won't do

“An international head, with an Indian heart” is how 49-year-old Subhanu Saxena describes his appointment to the top job at home-spun drug maker Cipla.

And it’s easy to see why. By his own admission, he speaks six languages, has travelled extensively, worked internationally across sectors from banking to consulting to pharmaceuticals. And, he used to teach Sanskrit, the Vedas and the Vedanta at London’s Bharatiya Vidya Bhavan. This week, Saxena was elevated as Cipla’s Managing Director and global Chief Executive. A development that comes months after Cipla’s grand old man, Y.K.Hamied, retired as MD.

In a recent conversation, Saxena explains why the Indian government needs to drop its “us and them” approach to industry, how multinationals need to do more “home-work” on their patent filings, and how Cipla looks to build on its strengths.

Excerpts from the interview.

Your last appointment was with Novartis. And Cipla and Novartis fought a patent battle here. When you were offered the top job at Cipla, how did you view it?

For me, it’s a once in a life-time opportunity. My first day at Cipla felt like coming home. I was approached last summer for this role and my first reaction was to look at it through the eyes of a competitor.

And then, I started looking deeper. I always had a lot of respect for Hamied, who is an icon in the industry, and there were other aspects to the role.

I have been giving career advice to family, friends and relatives in the US and Europe — Go East, go back, this is Asia’s time. From an economic standpoint, if you look at where all the growth opportunities are, where the energy is for companies to take their place on the global stage (it is with) Asian companies. So I feel that someone up above said, now it’s time to practise what you preach.

Cipla has built enormous strengths over the last 77 years and it’s time to take those strengths and deploy them on a global stage. Here was a company looking for direction and leadership, with the vacuum after Amar Lulla passed away. So they wanted somebody who had global international experience, but with an Indian heart — so it was like an international head with an Indian heart — and that’s me.

But no conflict in your mind? After all, Cipla and Novartis are on opposite sides of the pharmaceutical divide?

That’s because everyone’s missing the point. We should have a common goal, government and industry, to improve the health of the nation. The issue — and we’ve seen this around the world — people make these out as Indian issues, they are not. Every country is grappling with the issue of access. If you look at Europe, many countries have technology assessments, to assess cost effectiveness.

What Hamied has always said is that he is not against innovation. The issue is when you bring a drug under patent and extract monopoly profits, when a country cannot afford it, and the company is not prepared to make the product available at affordable prices. And there’s a public health issue — when it’s a life saving drug, there should be compulsory licence. Now Greece, Canada and many other countries have this legislation already, this is nothing new.

(A compulsory licence allows a third party to make its less expensive version of an innovative drug, on the payment of loyalty to the originator.)

Besides, if you are going to bring things under patent, make sure your patent’s properly filed and you’ve done your homework.

My own experience is that, if you see global multinationals, they put a lot of their top patent lawyers on US and Europe filings. They haven’t put the same attention in emerging markets and it’s every company’s right to assess and challenge weak patents. That’s nothing new. It happens all over the world.

So I think people miss the point. And multinationals do themselves a disservice by focusing on this issue, when everyone should be focusing on the issue of ensuring the right access to medicines wherever we operate.

When I interact with governments around the world, I see a difference. They openly say, our first goal is to build a self-reliant pharma industry. We like your investment, you can invest, but we’re going to build a strong industry — that’s every government’s right. They do that in partnership with their local industry. I don’t quite understand why there’s such an “us and them” in the Indian environment where, if we come together, we can do so much more for patients.

Why has Cipla seen so much management re-organisation?

It’s quite organic. There are some external hires, there’s lot of internal promotions. Kamil Hamied (Y.K. Hamied’s nephew) has become chief strategy officer. The aim is to build the right organisation and put the right people development plans in place; to get the right portfolio in place (where the investments are); to put the right growth strategies in place (India and international); and to keep the focus on fundamentals — high quality, etc.

We are launching talent development initiatives, not there in the past, to systematically build bench in all our key positions. In three years, each of our executive key positions should have a successor in the company. So that allows us to develop and grow lots of people. And that’s something I believe in passionately, may be it’s because of the teaching I do. My biggest passion is in seeing people grow and achieve things they never thought were possible. So I probably spend half my time right now on people development and making sure we do the right thing.

After Ranbaxy’s tryst with the US regulator, has the challenge become steep for Indian drug companies in developed markets?

It’s a challenging opportunity, because to be honest, the standards are rising everywhere — doesn’t matter where you are, really. I have also set up a quality organisation, independent of all the other functions, reporting directly to me. So I can get a full oversight of quality and continue to raise the bar. The message is simple, if you want to be a global player, you have to step up to global standards. And Indian companies have to make that call.

Your strategy ahead is, no risky investments?

The way we look at our investment decisions is very simple now. We calculate the worst case scenario and do the full financial analysis. If we can absorb the worst case scenario and not break our stride, we will take the investment.

So in an acquisition, for instance, you will not go after it?

No, and I am lucky, because of the runway we have — for every opportunity, I have five others on my desk. So sometimes, the most powerful thing you can do is to say “no”.

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