Adapting to a Brand-Focused MarketWed, 09/09/2015 - 12:36
Q: How would you describe the evolution of the generics market in the company’s 18 year presence?
A: When Apotex entered the Mexican market, the pharmaceutical industry was not focused on generics. As Mexico is a brand-focused market, it was difficult to establish a foothold when we began. A few key distributors already had contracts with innovative companies, and were not interested in generics. When we began to develop new channels, including directly supplying pharmacy chains, Apotex was able to harness the true potential of the market Once it was established that generics are high-quality drugs, many companies entered the market. Today the market consists of pure generics and branded generics, which contrasts with the situation in developed countries. The pure generics market represents just 5% in sales value and 14% in units of the total pharmaceutical market and is dominated by the pharmacy chains. However, pharmacy chains will soon have portfolios full of products with expired patents and we must be smart in analyzing the products that need to be launched to improve our portfolio and our brand. This means being more than just a manufacturer for pharmacy chains. We will enter other highvalue market segments and develop new channels.
Q: How different is Apotex’s production portfolio in Mexico to its original market in Canada?
A: We do not have the same portfolio in Mexico as we do in Canada. Apotex produces more than 58 products in Mexico, our biggest sellers being omeprazole, oral electrolytes, and nimesulide. In Canada, Apotex employs 2,000 scientists in R&D and locally we also have a specialized R&D team. We are currently building a new manufacturing site in Mexico to double our manufacturing capacity as pill production accounts for 43% of our sales. We hope to double this through technology transfer agreements. I am also implementing a new model for launching products, as well as setting up new processes, and a renewed culture for the commercial team.
Q: How challenging is it to create brand differentiation?
A: Even when generics were perceived as low-quality products, the Apotex brand was trusted and we have maintained this reputation. We still have room for improvement because our business processes and customer relations need work, and our portfolio must expand. In the past, Apotex has not adopted aggressive strategies when launching new products but we are currently launching ten to 15 new molecules a year. Today, foreign companies are very interested in the Mexican market, with companies from India entering the country with aggressive strategies. We are now in the process of increasing our capabilities and generally, the presence of more competition makes it a more challenging arena. We should not underestimate any of our competitors. That being said, the sector is not as dynamic as in other countries and many companies that were established years ago could not keep pace with the new regulatory requirements, and so disappeared or were acquired.
Q: What have the main developments been within the industry?
A: Physicians at pharmacies is something not seen in other countries. This approach was first considered to be unregulated and unethical but today it represents a major relief for the public system, as doctors in pharmacies provide important medical attention to patients. Instead of preventing the practice, the government is regulating it. Physicians should be responsible for providing patients with the best course of treatment, and resist pressure from pharmacy chains to prescribe certain drug lines. As Seguro Popular continues to develop, so will the opportunities for greater convergence of insurance companies, public bodies, potential investors, and pharmacy chains. From a business point of view, COFEPRIS forces companies to adhere to the same rules, meaning that our competitors are on par with us. There is more control over the third parties authorized to conduct bioequivalent studies and approval times are faster.
Q: Where would you like to see Apotex in five years?
A: In five years, Apotex aims to be the number one generics company in Mexico and to penetrate the therapeutic areas of most valuable to our customers. Finally, Apotex will increase its presence in Latin America. There is an excellent opportunity for us to gain leverage and we intend to be a driver of change. A biosimilar for Filgrastim will be launched in the US shortly, with the supervised version of the product commercialized in Mexico. We are seeking partnerships and alliances with other companies to bring these products to Mexico and Latin America.