has announced that it would reduce insulin prices to 10 cents (Rs 7) per day from $5 (Rs 350) for lower and middle-income countries, which account for 80 per cent of global diabetes cases. Kiran Mazumdar-Shaw
, chairperson and managing director of the Bengaluru-headquartered firm, tells that at 10 cents per day, the insulin business could be actually profitable if the company engages directly with the government. Edited excerpts:
Accessibility of insulin has been a major concern over the years due to its escalating price. Do you think the reducing the prices to 10 cents a day would be a game changer for Indian drug makers?
The 10 cents insulin is not just for India but for the global markets. However, you need economies of scale to make it profitable, which is one of our biggest strengths. Certainly, Biocon
sees it as a game changer for itself and for patients around the world. At 10 cents per day, we actually can do this very profitably by engaging directly with the government and making sure the government makes it accessible to the patients. We have big opportunities in both recombinant human insulin and insulin Glargine.
We currently sell recombinant human insulin only in India and some emerging markets, but we believe that it has a much bigger need. If we bring down the price, governments can afford to give them to their patients.
Why has Biocon not been able to crack the India insulin market?
It is not an easy market to tap. Most of it is a retail market and not a government procurement system. Diabetes patients in India mostly buy insulin on their own and Biocon is not a strong player in the retail market where prices are much higher. Biocon also supplies to a lot of states through tenders. Actually, we are already supplying 10 cents insulin through these tenders in India.
By when will the company’s new R&D facility in Chennai become operational?
It will happen by early next year. The new centre which expands our R&D footprint allows us to do research faster. Many of the 28 molecules, including the 11 we are developing with Mylan could be shifted to the Chennai facility for bringing in better focus and we could do a lot more with those molecules as we will have expanded capacity.
What is the company’s outlook for R&D spend? Will it grow or remain stable?
We are going to contain it within 13-15 per cent (of the topline).
What is the market opportunity in the biologics business? Is the company in line with target of achieving $1 billion in revenue from this segment by 2022?
Today, there are $260 billion worth biologics that can become biosimilars over the next 10 years. The markets that we have been addressing just with our initial products is over $40 billion. So the $1 billion revenue target we have set for FY22 is very realistic and doable.
Biocon had put the development of biosimilar Etanercept, used to treat arthritis, on the back-burner. Last year, your partner Mylan tied up with Lupin on the same biosimilar. What does it mean for the company?
We still get the financial interest in anything that Mylan does with Etanercept. We start going with partners if we see that their programmes are more advanced than ours. Biocon had prioritised its investments in molecules such as Pegfilgrastim and Trastuzumab. Although we did some work on Etanercept, we found that others are more advanced. For us, getting to the market in time is important. Hence we did a licencing agreement with them.
In what stage are the trials for the oral insulin project?
For Type II diabetes, the trials for which are happening in India, we have already completed phase II, and we are in discussions to enter phase III. For Type I diabetes, the trial will commence now in Europe. It will take a year before we get a read-out on this.
What steps is Biocon taking to reduce plastic usage?
We are trying to develop a strategy where we could make people to stop using disposable plastic devices and move on to reusables which last longer but are not very convenient. Only if people are willing and responsible, we can do that. Also, if we get a pushback from big pharma companies
on this, it may not be possible from a commercial competitive point of view.
What are your views on the National List of Essential Medicines that the government is drafting?
We need to get more and more life-saving medicines on to the list. But the government also needs to come up with a sustainable policy on how to arrive at pricing.