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Product Development Leads to Success

Iván Wong - Novag
Business Development Manager

STORY INLINE POST

Wed, 09/07/2016 - 09:58

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Q: How much potential does the generic segment have in Mexico and what role does Novag play in it?

A: The generic segment has grown on a yearly basis as generic drugs have become vital for Mexican consumers and their wellbeing. Even though Big Pharma has been impacted, society’s health in degenerative chronic diseases has been greatly improved due to our operations. Evidently, costs and availability play a big role in their success, which is unfolding on a global scale.

Novag’s background as a Mexican company has strongly positioned it in the generics market segment. We have close to 100 products, most of which are manufactured in our Tlalpan facility. Novag has consistently reached double digit growth over the past 10 years varying between 56 and 63 percent. We are 19th on IMS’ latest ranking for the ethical market, demonstrating that our work has positively impacted the segment.

Q: Novag is planning a MX$100 million (US$6.7 million) investment for a new manufacturing facility. How is this project moving along?

A: We acquired a new manufacturing plant in Tizayuca, Hidalgo. We are still in redevelopment stages, refurbishing it and acquiring new certifications. But we are yet to define the products that will be manufactured there. Although there are still loose ends Novag took a big step by investing and acquiring its new facility. Our business model is supported by extensive volume production, which will be secured with our Tizayuca plant.

We are working on expanding our portfolio in areas that have not yet been covered, such as hormones. Novag recently developed two retroviral drugs for HIV treatment. We are still evaluating the injectable pharmaceutical formula. The generic HIV segment has grown significantly in recent years as patent expiration has further increased their accessibility coupled with the government’s push for their development. We may move these developments to our Tizayuca plant. However, our next course of action is yet to be defined. Manufacturing large volumes of drugs in our new facility makes sense as its excess space can easily cover the generic demand created by the government.

Q: How does Novag differentiate its generic products from its branded generics?

A: Novag’s strength is in its product expansions resulting in nine yearly product launches. Therefore, growing and strengthening both portfolios is Novag’s best course of action. We cover the demand of public institutions and individuals. Novag is one of the largest branded generic manufacturers, which makes for a large part of its business. Product development is fundamental for Novag’s success and profitability.

Q: How have pharmacy-own brands affected Novag’s operations?

A: These market trends have been beneficial to our operations. New marketing models have propelled Novag’s growth as its market share participation in the branded generic segment is quite large. We are not selling a brand but rather a molecule. Distributing our own branded generics has propelled the company’s growth over the past two years. We are strong suppliers to pharmacy stores, supermarkets and a number of convenience stores amounting to 55 percent of Novag’s overall sales. The remaining 45 percent is attributed to the public sector, as we have secured multiple tenders throughout the years.

Q: What new projects does Novag have in store for 2016?

A: We will finally see the Novag brand reach Central America. Last year, the company won three product tenders in Honduras and we are registering six products in the Costa Rican market. Regional regulations are no easy task, especially in Costa Rica as it follows FDA guidelines. Nonetheless, the company will gain recognition and grow exponentially when it prevails. Ecuador and Peru will surely follow, further expanding our presence in Latin America. Novag settled on Guatemala, Honduras and Costa Rica, mainly because they are similar to Mexico’s market. The regional market volume these countries jointly make up is extremely interesting.

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