I GOT THE ABOVE INTERESTING IMAGE FROM HERE.
The human quest to overcome adverse circumstances is eternal. Every person wants favorable circumstances in his or her life. The quest to avoid and overcome unfavorable circumstances is very challenging. No amount of knowledge, skill and native intelligence seems to be enough to avoid unfavorable circumstances. Einstein, a genius in our living memory, faced unfavorable circumstances in his domestic life.
Today, even the most intelligent business person perhaps did not anticipate the knotty economic mess that plagues nations. Today, the world is united by the global recession! THE ONE INTERESTING THING ABOUT FACING ADVERSE CIRCUMSTANCES - it teaches humility, and one says goodbye to HUBRIS!!
Pharmaceutical and healthcare businesses in India are yet to face the heat of an economic slowdown in the domestic market. Perhaps pharma companies may never face recession since the domestic pharma business never saw a sudden boom. However, it is justifiable to expect that the double digit growth of the pharma industry may now turn to single digit growth.
Patients are certainly going to ask the chemist or doctor for economical alternatives and will invest only on the very necessary drugs. However, the cost of drugs in India is not prohibitively high, so people may not cut down on drug and healthcare expenditure significantly. They may postpone it, but not indefinitely. Patients will also invest more time on yoga and other non drug therapies to try and control the course of disease and maintain wellness. This would definitely be economical to the patient.
Pfizer strategizes boldly to avoid an adverse circumstance in 2011 - but sweeps people and cultural issues under the carpet
The top management is always keyed on to defining the future of the organization. It is said the future belongs to those who can invent it. And in this vein, Pfizer has made a bold strategic move to acquire Wyeth, for 68 billion dollars. Wyeth has a promising biopharmaceutical portfolio and pipeline. So this acquisition makes financial sense as Pfizer is bulletproofing its position #1 - 2011 onwards - when the Lipitor patent expires.
However, a mere financial purchase does not make an acquisition successful. There are numerous cultural and people integration issues. A merger or acquisition poses a lot of systemic challenges. Although Pfizer has not addressed this issue publicly - they need to do so. THERE ARE TALKS THAT THERE WILL BE MASSIVE JOB CUTS ALMOST 19500 (EQUIVALENT TO 40% OF WYETH'S WORKFORCE) IN THE USA. This may not happen in India, at least at the MR level, as the market dynamics are different, market coverage will suffer if MRs are asked to quit and that will further affect revenues.
When Tatas took over Corus it was not the financial matters alone that mattered, the people and cultural issues were equally vital. What was important to the Tatas was that there was a cultural fit in the takeover of Corus. Do pharma companies ever think of such issues? Pharmaceutical acquisitions seem to be singularly insensitive to these matters. To pharmaceutical companies, mergers and acquisitions are mere business therapies, and side effects like job cuts seem to be taken in the stride. However, the moot question is - is this insensitivity to people and cultural issues healthy for the pharma industry?
It reminds one of the Wild West stories of cowboys fighting to take control of green pastures and valuable cattle. Why is the pharma industry as compared to IT and engineering fields insensitive to people and cultural issues?
The business model is changing
Industry pundits (CLICK HERE) say that the largest drug market in the world ie., the US of A which is a 286 billion dollar market is maturing and gaining a competitive stage. This sets the stage for further consolidation in the industry. This is compounding the adverse situation. One can expect pressure on product margins. The stage will lead to commoditization of the industry in USA.
In India, this has already happened. We never had product patent protection, hence, very big margins to pharma companies was not possible. Product patent protection is only a recent introduction, post 2005. Indian Pharmaceutical market has always had a lot of commoditization.
So how to survive in a severely competitive market?
The Indian answer is jugaad (or native inventiveness). The answer lies in being novel or innovative with respect to BRAND NAME, DOCTOR RELATIONSHIP MANAGEMENT, DISTRIBUTOR RELATIONSHIP MANAGEMENT, AND OFFERING VALUE-FOR-MONEY PRODUCTS/MARKETING PREPOSITIONS.
The above language is very odd for pharma marketers who are used to marketing PATENTED PRODUCTS. Pharma marketers of patented products are used to monopoly markets, virgin markets, high margins, tight control over doctors and distribution, and commanding huge premiums on the price of the product (justification - I invented the drug with lots of toil, sweat, blood and tears). There are no competitors to bite at the innovator brand. Hence, there is a lot of hubris (a kind of technological hubris) in the pharma marketer of patented products. In a competitive and commoditized market one can say goodbye to all such attitudes.
Not just commoditization of drugs - but also of drug classes and therapies
The unique global pharma market feature is not just commoditization of drugs but also of drug classes and therapies. The market is very crowded with so many new and latest drug types that the doctor too in a way is bewildered with the pros and cons of so many options.
When such is the situation, there is a lot to learn from Indian pharma marketers. And one thing Indian pharma marketers do not have and cannot afford to have - ie., HUBRIS. When you drop hubris, jugaad begins. This word means 'working around' it comes from the name of a vehicle. The quintessential feature of jugaad is making best of the circumstance. Perhaps one of the best example of jugaad in Pharma is the FPO (fruit process order) based aseptic product - electrolyte energy drinks in natural fruit juice base with Tetra Pak technology for prescriptions. (www.jagdale.com firstname.lastname@example.org)So let us drop the hubris, and solutions will open up through JUGAAD!!
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