Nashik: The world’s second-largest drug maker by sales, Glaxo SmithKline Plc., is actively looking at acquisition opportunities in India as part of its growth strategy, its chief executive Andrew Witty said in an interview.
Witty was in India on Monday—his first visit to the country after taking over as CEO in October—to dedicate a unit in Nashik, Maharashtra that makes anti-filaria drug albendazole to the World Health Organisation’s global programme to eradicate the disease. Edited excerpts:
Growth strategy: Witty says the firm will always have its key focus on the branded business and will also look at external research collaboration.Abhijit Bhatlekar/Mint
As part of an overall change in your global strategy, are you emphasizing a major shift in the business model in India?
India continues to be a critical market for GSK. Our Indian model was always a combination of branded generics and innovative brands and it will continue to be so...We tried different approaches and the success has been phenomenal. We have introduced several new vaccines, a few even produced here, and there will be more from our development pipeline.
GSK India is sitting on a cash reserve of more than Rs1,500 crore. What are the strategies to leverage this money to enhance shareholder value?
We continue to look at opportunities to use cash on our books. As part of our strategy, we are actively looking at growing organically and inorganically. These opportunities will be evaluated based on a variety of factors, including the strategic nature of the fit.
There were reports that GSK was in talks with some Indian drug makers to acquire them.
I will be dishonest if I say that the company is not looking for acquiring assets in India. But we are not interested in pure generics play and such models followed by Ranbaxy (Laboratories Ltd) and Dr Reddy(’s Laboratories Ltd). We may look at opportunities including brands in pharmaceuticals and consumer healthcare that would offer real value-for-money.
Many top drug makers have few products in the pipeline and there aren’t many high-value molecules coming out of their drug discovery activities. Will GSK face similar difficulties by focusing mainly on its branded business?
We are confident that our current research spend of $3.95 billion (Rs18,000 crore) a year is capable to support our branded business portfolio. The company has at least a dozen late-stage molecules coming up for the market. GSK will always have its key focus on (the) branded business. We will also look at external research collaboration.
Many of your rivals have initiated separate generic business model in India.
Almost all pharmaceutical companies have adopted a slightly varying model to approach (the) branded generic business. GSK’s strategy is about access and making high-quality medicines available to the maximum number of patients. And this strategy is here to stay.
How do you perceive the regulatory and intellectual property regime in India?
We are very positive about the transformation that India is now pursuing on the intellectual property as well as drug regulatory regime. One should have patience to wait for the real convergence of any new legislative regime and should not expect any overnight changes.
With the WHO programme, GSK offers albendazole free in countries where filaria is prevalent. Will you also reduce prices of more high-cost drugs for widely prevalent diseases across markets?
We support (the) filaria eradication project and have programmes for many other tropical diseases under our CSR (corporate social responsibility). In India itself, we have 8-9 such projects going on. But reduced or differential pricing may not be always a solution, though we have adopted such plans in many countries according to their economic conditions, in addition to joining the free patent pool, which is open for generic manufacturing.