Indian market is important for us, looking at the sheer growth potential3 min read . Updated: 25 Mar 2010, 11:07 PM IST
Indian market is important for us, looking at the sheer growth potential
Mumbai: Belgian multinational drug maker UCB SA’s global chief executive officer Roch Doliveux was in India earlier this week as part of a business delegation led by the country’s crown prince Philippe. UCB, one of the world’s largest firms in the patented speciality drug market, has been in India since 1959 through a joint venture with local drug maker Unichem Laboratories Ltd. In 1998, it established a 100% subsidiary by buying out its partner to strengthen its presence in the Indian market. However, the lack of a strong intellectual property rights regime in a predominantly generics-driven Indian market made the going tough for the firm.
UCB is currently fighting an important patent case in India with the patents office and the country’s largest generic drug maker Cipla Ltd against the rejection of its patent application for an anti-allergic drug. Doliveux said UCB hopes the situation will improve; that it is here for long-term play and is looking for more local partnerships, including acquisitions. Edited excerpts:
UCB has been here for more than five decades, yet your presence in the local market is not significant. Why?
Yes, it has been here for almost 50 years. But our emphasis on the pharmaceutical market has become stronger after it turned to be (a) pure biopharmaceutical company a few years ago. Earlier, UCB was a diversified chemical company. The Indian business became a 100% subsidiary only a few years ago. Generic competition was a key factor that impacted UCB’s growth here.
UCB, as a research-based company, sees strong intellectual property law a key factor that supports our business. We spend 23% of our global sales (around $3 billion as on latest fiscal-end) on research.
This is dedicated to innovative products to treat patients for severe diseases. By the time we reach Indian market with such products, there will be a number of generics available here. So, pricing issues and the generic competition were partly responsible for the slow growth.
Do you believe the protection of intellectual property rights is improving?
It is gradually improving. Last year we were the top company in the US with our new medicines for several critical diseases. Of these, majority are under patent protection. This is what exactly we expect from the heavy investment that we put in research.
Patent protection is key to our strategy in any market.
I am happy that it is getting improved in India, and UCB will be recognized in the country for its high-end and new generation drugs, though it may a take a while.
What are your target areas for growth in India?
Our ambition is to be recognized in the market as an innovative company as it is in the US or elsewhere. But, here most of the molecules that we have in our portfolio are not under protection. Since the situation is improving, we will be able to launch many more products in the market in areas that we are strong in at present. These segments include neuro- and brain-related diseases, immunology, arthritis and anti-allergy, among others. Besides, we are looking for partnerships and collaborations in research, drug development activities, marketing and manufacturing.
Are you looking for partners?
We have already formed a few partnerships with companies such as GSK India (Glaxo SmithKline Pharma Ltd), Accenture Plc, GVK Bio (GVK Bio Pvt Ltd)—to name a few—in areas such as drug marketing, development, information technology, business processing. These partnerships, most of them formed some three years ago, have scope for expansion, and to build them up further.
We are also looking for new collaboration in India, as the country has brain power and many more capabilities that can be tapped to establish business growth in the local market as well as other markets of UCB.
Since our manufacturing facility in Vapi (Gujarat) has been approved by US Food and Drug Administration now, 20 years after it was set up, we may even use this facility for exports from India.
How much money will you invest in these new opportunities?
As I mentioned, we spend 23% of our sales for research. Though a major portion of this investment will remain in Belgium, a significant part of the rest may also come to India as and when the opportunities come up.
Are you also looking at acquisitions, as pure organic growth in India will take longer?
Indian market is important for us looking at the sheer growth potential. It would also help UCB’s growth in other markets. So we are here as an open company to grow in this open market, and we are open to explore any opportunities if there are companies that can contribute to our line of growth.