Mylan, coming soon in a new business avatar

There is a method to the madness, says Mylan President Rajiv Malik, on the spate of activity the generic drugmaker has been through, in its “transformation” to become a diversified company.

In July, US-headquartered Mylan announced it would combine with Upjohn, Pfizer’s off-patent branded medicines business, to create a new global pharma company. The mega transaction gives the combined entity a foothold in China, besides bringing into its fold international brands such as Lipitor (for cholesterol), Viagra (erectile dysfunction) and Celebrex (arthritic pain), among others.

There has been a lot of activity, concedes Malik, during a recent visit to India, outlining milestones ahead with Upjohn and its role in the global commercialisation of Pretomanid, a new and critical Tuberculosis drug.

Malik describes the activity as the “continuation of a journey”, but Mylan stands poised for a massive “business transformation” with the Upjohn transaction expected to be completed by mid-2020. Malik will be President of the new, rebranded company.

So, will the transformation involve rationalisation of overlapping brands and employees?

The rationalisation process has been under way in the standalone company, says Malik, given the acquisitions of established pharmaceuticals from Abbott (2015), Meda (2016) and Renaissance Acquisition holdings (2016). “We did not get time to sit down and rationalise. We started rationalisation last year,” he says, adding that a boutique consulting firm has been engaged to help navigate the course.

“We are 55 per cent in generics and 45 per cent branded OTC (over the counter drugs)... we are a consolidated company,” he says.

China factor

On the benefits from Upjohn, Malik explains that it will diversify the product basket from generics to established brands, besides giving Mylan a strong foothold with Upjohn’s sales force into China, a fast growing healthcare economy.

The China factor comes even as Indian drugmakers chart their course into this market, as the Indo-China trade relationship comes under the spotlight, even more so with the visit of Chinese President Xi Jinping to India. The Upjohn transaction will also give Mylan a critical mass in Korea, Brazil and Mexico, adds Malik.

India base

India has played a critical part in Mylan’s journey and will continue to participate in this global play, says Malik. The combined entity will have a global base in Hyderabad. Harking back to 2007, he points to the Matrix acquisition that helped leverage an important geography like India, from both a cost and science perspective.

And with an eye on a diversified portfolio, Mylan’s journey in India saw partnerships forged with Natco, Biocon, Gilead and, recently, with Eisai.

Pretomanid for India

On bringing TB drug Pretomanid into India, Malik says the company is in advanced stages of discussion with the Indian drug regulator to bring this “meaningful product” quickly in and not be trapped in a “bureaucratic process”. And with healthcare workers closely watching how it will be priced, he says, “You can believe that we will be very considerate of the nature of this product and how it needs to be priced.”

But the company is “open to every option,” he adds, responding to whether the company will partner with Government in a model similar to Johnson and Johnson’s, on its breakthrough TB drug Bedaquiline.

Generics criticism

As a major generic drugs maker, Malik bats for the industry, saying it has played a huge role in saving healthcare costs across the world.

The generic drugs industry, meant to bring out less expensive, quality drugs for patients, is presently facing criticism on both counts globally.

In fact, Malik is named in a US price-collusion case, though the company stands by him.

“Personally, hopefully it all comes to a logical end sooner than later,” he says.

On quality concerns, he is unwilling to differentiate between a generic and a branded product. In fact, quality problems could arise “anywhere, in any geography, or (with) any brand”, as seen with warning letters over the last two decades, he says.

Pointing out that Indian companies are working with regulators to up their standards, he says, “the exceptions should not be taken as a point to harass the whole industry.”

As Mylan now prepares for its new global avatar, it will have to operate in the times of Brexit and “America First” campaigns.

But, Malik points out, “Our strategy was, we don’t want to be a ‘one product, one market, one channel’ (business). We want to build this globally diversified business ...I strongly feel globalisation is in need and will continue.”