‘Our focus on India remains’

There would be no acquisition to merely “bump us up in ranking”, Merck Sharp & Dohme’s (MSD) then chief had said in February 2009. MSD believed that “responsible pricing” of medicines, supported by patient-centric services, was the right approach to a domestic market already witnessing patent battles between drug companies.

Later that year, K.G. Ananthakrishnan became Managing Director, and in the last three years at the helm, he has witnessed both an acquisition (of Schering Plough) and patent litigation!

Steering clear of discussing the patent litigation involving its diabetes drug sitagliptin, Ananthakrishnan explains how his company, part of American drug-major Merck, goes about trying to build its business, meaningfully.

Some edited excerpts.

In the last three years, you witnessed a global acquisition and local patent litigation. How has the journey been?

It’s has been both interesting and challenging. Whatever we do as MSD in India, we try to put the patient at the centre and work around it with products and services to make a meaningful impact.

We decide the areas to participate in, based on our global portfolio. So we are in diabetes, cardio-vascular, metabolics, respiratory, critical care, hospital products, and vaccines. Merck spends about $8 billion on research and has an interesting pipeline.

So when we decided to participate in diabetes, it was not just to bring first in class products, but also services around it. There are 62 million people with diabetes — a big challenge.

Medicines can only do that much. It needs a holistic approach of diet, counselling and exercise, or it won’t get the required outcome. MSD has a programme to counsel people on its diabetes medicines; there are awareness programmes on cervical cancer; a programme on antibiotic resistance for hospitals; there is a capacity-building programme for doctors to bridge the knowledge gap between the general practitioner and advancement in science in smaller cities and there is a database being compiled.

So, getting back to why it’s interesting. What we are trying to do is not just bring products into the market. We are trying to take an issue that is a challenge in the country and address it in a comprehensive way. And through that, build our business. It is not charity. At the end of the day, we are building business. But doing it in a manner it makes a meaningful impact.

There are also several partnerships in India. In diabetes, to improve access, we partnered with Sun Pharma on sitagliptin because they have a deeper geographic penetration compared to us.

We have over 13 partnerships and close to 80 per cent of our products by volume are manufactured locally in India. We are happy with these partnerships. We have a partnership for emerging markets with Sun Pharma, besides research collaborations with Piramal and Orchid. This is just a snapshot of where we are today.

With industry concerns such as price control on medicines and patent litigation being a reality, where does growth come from?

There are challenges whether it is patents or pricing. Merck is committed to India. The way we are going about it is — of our existing assets we have already launched several global brands on which we grow our existing business.

We have lots of assets that have not been launched and they will be launched systematically — be it vaccines or other products. We also have a good pipeline and in the next five years a lot of interesting products will come from the Merck pipeline. That will be the third bucket of revenue to come in.

Then there are partnerships. Good ones like with Sun are growing extremely well. It helps us meet the larger objective of improving access and making our products reach wider.

On pricing, we feel happy that on almost every product we are launching in our country, we offer an India-specific price. We launched Januvia and Janumet at a fraction of the price anywhere in the world. So we are aware of the local situation and are trying to align and develop our strategy in tune with the requirement of this market.

That is why in every single area, whether it is product selection, pricing, marketing, market development — we are going the full length to ensure that we make a full impact in the chosen areas that we have decided to participate.

Differential pricing, notwithstanding, you are facing a patent challenge on sitagliptin from Glenmark. Your thoughts?

We are disappointed when there is a blatant violation of patent because the foundation of the pharmaceutical industry, especially the research-based pharma industry, is bringing in new molecules.

Where you spend millions of dollars to come out with a first in class and best in class molecule, that is where the IPR (Intellectual Property Rights) law provides a window of time to recoup investments made in research, and that again gets ploughed back in research.

This is a continuous process, so when there is a violation of a valid patent there is a definite degree of disappointment.

We have tried to do everything, whether it is price, education or building capacity — we have tried to do everything that is possible in the country — not just in diabetes, but in every area.

But will this affect your commitment to the Indian market?

At the moment, no. We are continuing in the same way. Our focus on India remains. It is one of the high-growing pharma markets. We are continuing to invest in India.

We are growing the market. We will address these challenges and we are hopeful that somewhere down the line, our lawful rights will be restored.

After the $41 billion global acquisition of Schering-Plough, is the integration through in India?

The merger and acquisition between Merck and Schering-Plough has been done and we operate as one single integrated corporation.

We have three legal entities: MSD Pharmaceutical, Organon (India) and Fulford (India) Ltd. But operationally we are one single entity. And we are retaining the listed entity (Fulford).

There have been concerns over cervical cancer vaccines. How is your product faring?

For a period of time, there was a slowdown. Last 18 months, the awareness on cervical cancer has gone up. People are coming to know more. It is a big disease burden in the country.

India has 27 per cent of the global incidence. Over 73,000 women die every year because of cervical cancer. This is a preventable form of cancer. According to the latest WHO (World Health Organisation) norms, safety and efficacy of the product has been reinforced.

If you go back 25 years, how many people knew of breast cancer. But today, people talk about it and are not inhibited. So hopefully, somewhere down the line, the same will happen with cervical cancer.

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