Springboarding from a Single Entry PointWed, 09/09/2015 - 15:31
Q: Glenmark Pharmaceuticals is headquartered in Mumbai, but has a global outlook – what role does Mexico play in the company’s international strategy?
A: Glenmark has grown quickly from being a company with an estimated value of US$30 million to more than US$1 billion in just 14 years. We have expanded to 88 countries and have 15 manufacturing plants worldwide as well as five research & development centers. Between 2008 and 2009, we opened offices in Mexico, Venezuela, Peru and Ecuador and currently Mexico is one of Glenmark’s top priorities as a country with a strong healthcare economy and sales potential. Our first challenge was to introduce our dermatology line to the local retail market, as at the time the Glenmark brand was unknown in Mexico. Following that the next challenge was to integrate a team of qualified professionals who are fully compliant with our values, goals, and identity. Glenmark covers several different therapeutic areas including dermatology, respiratory, oncology, and cardio metabolic. We also have a strong research arm that is currently conducting studies on arthritic pain and biotechnology. Our strategy in Mexico has differed slightly from our general global strategy as we began with only a single prescription product for dermatology and a dermocosmetics line. From that point we prioritized the creation of operations, stimulation of cash flow, and submission of a diversified product line. In Mexico 20% of our products are innovative, and some are patented, while the remainder of our local portfolio consists of branded generics.
Q: What were the biggest challenges you encountered establishing a product base?
A: The Mexican market operates mainly through distributors, and gaining the support of key investors in Mexico has been extremely difficult. Several investors have had negative experiences with companies originating from India or China, some of these companies entered the Mexican market temporarily and subsequently withdrew their products. Convincing companies of our long-term investment viability was problematic. The other issue is that India, China, and Korea all represent manufacturing threats to local industry and the main way for the local and international industry to protect itself against competition has been through perpetuation of the preconceived negative image of foreign products. However, we recently had a meeting with the India-Mexico Business Chamber to promote collaboration between both countries to facilitate trade. Mexican regulation requires COFEPRIS to inspect the manufacturing plants of companies importing products and it has already inspected and approved several of Glenmark’s manufacturing plants. Mexico has several useful commercial trade agreements which allow Mexico to recognize good manufacture practices in other countries and vice versa, but this does not imply that COFEPRIS will be able to accept the product immediately.
Q: How have you adapted to the expanding market and its inherent differences?
A: Mexico consumes the second highest levels of generics after the US, and the consumption is much higher than that of Germany, the UK, and France. The pharmaceutical market in Mexico has grown only slightly in value over the past five years, by about 2 to 3%, but it has grown considerably in volume, at more than 20%, due to the introduction of generics. Generics have allowed the government to significantly reduce their medicine expenditure, negotiate better prices, and provide treatment to more patients, therefore acquiring resources to finance other medical projects. Two years ago we sold exclusively to the retail market, whereas today, we sell 80% to the retail market and 20% to the government. Our goal is to reach 60% within the retail market and 40% within the public sector.
Q: What are your expansion plans?
A: Glenmark Pharmaceuticals was recognized as the Best Company Across Emerging Markets and Best Overall Pipeline in 2011. We will keep working to obtain greater market share, mainly in the dermatology and respiratory areas, which are our strongest at this point. We will expand our oncology portfolio, as well as other areas such as diabetes and cardiology, which are both important divisions for Mexico. Glenmark will also continue researching its key therapeutic areas and we will seek other areas to expand on. We also plan to expand specific business lines within the government sector, since we have an extremely well defined strategy in the public sector. Glenmark Mexico has grown more than 250% in terms of personnel in the last four years and at an increased rate in terms of sales.