Forbes India 15th Anniversary Special

India is rich from a science perspective: Rajiv Malik

The president of Mylan, on building partnerships to ensure affordable health care for all and the pharma company's philosophy of keeping the patient at the centre of everything

Manu Balachandran
Published: Jul 30, 2018 03:02:48 PM IST
Updated: Jul 30, 2018 04:01:18 PM IST

India is rich from a science perspective: Rajiv MalikImage: Amit Verma

In 2007, Pennsylvania-headquartered Mylan coughed up $736 million (then ₹3,424 crore) to acquire Hyderabad-based Matrix Laboratories in the largest ever acquisition then in the Indian pharmaceutical sector. The acquisition helped Mylan become one of the world’s largest manufacturers of active pharmaceutical ingredients (API) overnight.

A little over a decade later, India has emerged as the hub for Mylan’s global operations and the country plays a significant role in the company’s R&D programmes that are focussed heavily around HIV and oncology care. In an interview with Forbes India, Rajiv Malik, 57, president of Mylan, speaks about the pharma company’s attempt to improve access to HIV medication, India’s price control regime and the global pharmaceutical industry. Edited excerpts:

Q How has your experience been in India?
India is the hub of our operations and one of our R&D hubs too. It is an important market from a business point of view. We started [commercial sales] from scratch in India five years ago and were the nth player in this crowded market. We have built it brick-by-brick. We were looking for scientific selling and engaging with patients and key opinion leaders [doctors]. Today, the business has achieved scale. Wherever we have launched our products, we enjoy close to 35 percent market share. We did well in the critical care, oncology and breast cancer segments. HIV care has been great too. Matrix brought that to the table and HIV was the first portfolio we launched here. We have a meaningful market share of 15 percent. We are the primary supplier of HIV products to Naco (National Aids Control Organisation). In India, we have a ₹1,000-crore business (by revenues), built over five years. It has been our fastest growing business. 

Q Does the ₹1,000-crore business include the Matrix acquisition too?
It does not include the Matrix API. API has been static and it is roughly around $200 million (₹1,370 crore). There is a different way to do the math for India. India is the hub for emerging markets and our global HIV business is based out of India. We supply to 165 countries like the US, Australia, Japan, and also to regions like Europe from India. Because a lot of this is intra-company sale through our business in Europe, or in the US, we can’t quantify it.

Q Globally, Mylan’s attention seems to be on HIV medication. Is it the same for India?

We supply all types of products —injectibles, oral doses, API, biosimilars—to all markets. India is a hub for all products; HIV is one focus area. HIV products are not made anywhere else in the world. They are made in India because all the necessary ingredients, right from inception to conceptualisation are here. All APIs are essentially done in India… that’s why all the plants are here, and that’s the way we do it.

Q Globally, how challenging has it been to increase access to HIV care?
Our mission statement is to provide access to the 7 billion people across the world with affordable, quality products. Segments like HIV may not be lucrative from a business point of view, but for us, they are part of the ‘do good, do well’ theme and we are passionate about that. Matrix gave us a headstart in terms of APIs and the understanding of the business and Mylan scaled it up.

Q The global pharmaceutical industry has seen serious regulatory concerns. How is the industry shaping up?
This has been an interesting and challenging business. It is a highly regulated industry. You are regulated from a regulatory point of view, quality-wise as well as in terms of environmental responsibility. In many countries or regions, for example India or Europe, there is price regulation. You cannot just make a product and sell it in any country. You need to go through the regulatory process and get approvals from the safety and efficacy points of view; that your product complies with local standards. There is always a barrier and some good barriers.

There was a period around 2010 when Europe was in a flux. In the European market, we were seeing price containment with governments launching initiatives that made 20-30 percent cuts on reimbursement prices. You suddenly woke up and realised your margin had been cut by 20-25 percent.

India is going through some of that with this NPPA (National Pharmaceutical Pricing Authority) regime. The industry is looking for some levels of transparency, clarity and predictability. It just can’t put up something overnight and say 340 products have a new price the next day. The US is now in some sort of a flux, and the next election will be fought around health care. It is a rich health care business ($3 trillion or ₹205 lakh crore). The pharma business is around $350 billion (₹23 lakh crore) with generics constituting $80-90 billion (₹5.4-6.1 lakh crore). There are many levers that are in play at the moment. So you don’t know what you don’t know, but we try to plan around what we know. We have been able to manage this complex global diversified business and grow it.

Q The Narendra Modi government is planning a health care-for-all scheme soon. What’s your view on that?
That’s a great step forward. India was perhaps one of the few countries not playing an active role, as a government, in health care. Having an insurance net for 50 crore people is a great step forward. It will depend on how well it is implemented. It is an opportunity in terms of volume growth for the industry because as more people come in, we will need more medicines and drugs. That is one end. The other end is that India has seen price control for the past few years. It needs to have better visibility about where it is heading.

Q Is price control in India that big a concern?
With so many players in the mix, it is essentially a market-driven pricing opportunity. You can always have a handful of products, but then where do you draw that line? You continue to expand that basket and that’s where the pain point is. That’s where the industry is a bit sceptical… about how deep they are going into that portfolio. You don’t have that visibility. I don’t think they are putting every data point on the table when they make these calls. That would hinder innovation, entrepreneurship as well as making investments. If you aren’t sure about the regulatory regime of a country, you have one big data point missing when you strategically evaluate an option.

Q For a long time, Indian pharma companies were under the constant watch of USFDA regarding quality…
There has been a focus on India… and that will drive the Indian industry to a more sustainable position because FDA measures it to the CGMP (Current Good Manufacturing Practice) and the standards continue to evolve. Many Indian players are caught in the vortex of those standards. They assumed they were there, but when they started deploying different yardsticks, they weren’t there. Everybody has gone through that and understood the new expectations… they are now taking time to raise the bar internally. There were peaks… this was a painful patch for 2-3 years and the Indian industry will now start towards another peak.

Q What are some of Mylan’s other focus areas apart from HIV?
Infectious disease has been a core area. Under this we have HIV. Tuberculosis and malaria are the other two. We also have a deep portfolio and a strong pipeline around oncology. Now, biosimilars have been added to the mix. We made an acquisition in the area of women health care and are consolidating our portfolio around that. Respiratory is another area which is our focus; we are looking forward to launching our generic health care in the US market. If I have to name one more, it is dermatology. 

Q With cancer on the rise, access to oncology remains a critical area…
In oncology, there are certain biology products which are not launched in many countries. When we are launching the products, we are taking it across every market we are in. Even when we launched our drugs in India, the number of patients having access to the affordable product would have tripled. In the case of hepatitis, there are about 12 million patients potentially impacted in India. We are trying to engage with them from an awareness perspective and testing point of view. Cure is available; it’s not preventive. We are keeping the patient at the centre.

Q Where does Mylan go from here?
We want to continue to drive this company towards access. We call it expansion markets where we see huge scope to expand access. We are in China, but on a small scale. We have a couple of hundred people there and sell about 5-6 products. We are in Russia, through a couple of hundred people. We see many of these markets as an opportunity to expand our access and achieve critical mass. Another goal is wherever we are, we want to be in the top 10. For example, in the US we are strong, in France we are the largest company and so on. There are markets in which we have already solidified our position, but there are many more where we have an opportunity to grow further.We want to expand and continue to execute our science. That means complex products and biosimilars.

Q Does that mean more partnerships such as the one with Biocon?
It’s one thing to have a partnership, it is another to manage and execute that. But we have a successful track record. Our first was with Naco; the second was biosimilars—which is a partnership with Biocon—and then we have one with Momenta around biosimilars where we have five programmes. Wherever we had some gap, we had some opportunity, we have gone ahead and partnered. We partnered with these companies to evolve and build upon the science. What we bring to the table is the regulatory compliance, experience, clinical expertise and intellectual property expertise. We will be looking for more and more [partnerships]. India is rich from a science perspective, and we don’t believe that we have even tapped, or scratched the surface of the potential here.

Q How do you strike a balance between shareholder interest and affordability?
This is where Mylan has tried to act differently. Shareholders are [just] one [of the] stakeholder(s). Patients, doctors, employees are the others. Shareholder interest is one of the key points.

We could not have expanded and made these strategic calls without the calls that we have taken to expand Mylan from a one-country, one-market focus. When Mylan acquired Matrix and Merck’s generics business back to back, it didn’t go down well with shareholders. It took us six years to prove that whatever we are going to do, we are going to do it better than what we have thought. If you look at our returns, we have delivered more than what we had promised every year. It’s a good business if you make the right strategic calls, but more importantly execute them in the right way. You can meet the expectations of all stakeholders, and that’s what we are doing.

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