Annaswamy Vaidheesh, vice-president, South Asia, and managing director, GSK Pharma, said in the firm’s annual report: “We optimised our product portfolio, identifying key brands behind which we put resources to actively promote.” The top 10 brands of GSK Pharma contribute to 54.8 per cent of its revenues — mature brands like Augmentin (antibiotic), Calpol (paracetamol), T Bact (antibiotic topical ointment), and Betnovate (topical corticosteroid) continue to clock double-digit growth.
Similarly for Pfizer, its top 10 brands contribute around 50.4 per cent of its India turnover and its mature brands like Becosules (vitamin), Corex DX (cough syrup), and Gelusil (antacid) clock double-digit growth. In fact, brokerages now bet on the Indian subsidiaries of MNC drug firms. In the past 12-18 months, MNCs
have seen improved performance with strong double-digit revenue and earnings before interest, tax, depreciation, and amortisation growth.
According to a recent CLSA report, this resurgence is due to their increasing focus on key brands as well as a rising acceptance of patented products in India. CLSA noted, “MNC stocks have outperformed local peers for the first time in over a decade and have also significantly outperformed the Nifty over the last 18 months.”
It felt that better brand recall and a patented product portfolio placed MNCs
in a better position to thwart competition at a time when there is broadening of the range of products falling under price control and threat from trade generics (Jan Aushadhi). Affordable health care has been a key priority of the current government.
In fact, seven of the top 10 brands sold in India belong to MNCs. Indian firms, on the other hand, have been grappling with the ban on fixed-dose combination drugs, portfolio of drugs under price control as well as battling the regulatory scrutiny in their export markets.
“The Indian subsidiaries of MNCs have the back-up of parents when it comes to new drug development. We have to focus our research and development to developing copycats of off-patent drugs for the regulated markets. This leaves little scope to develop innovative drugs for the Indian market,” said a senior executive of a leading pharma firm, which ranks among the top in India and in the US.
He added that MNCs also had a clear advantage when it came to brand recall for segments like vitamins and had a repertoire of vaccines where Indian firms have a long way to go.