Mankind keen on lowering cancer drug prices, awaiting government policies, says Ramesh Juneja

Mankind Pharma, the fifth largest Indian drug maker by market share, is keen to produce cancer drugs at low costs and treat the portfolio as a service for the masses without earning anything from it, says Ramesh Juneja, founder and chairman. In an interview with ET's Soma Das, Juneja also said it is the company's low-cost strategy that has prompted rumours around the quality of its drugs. Edited excerpts:

Q. Is Mankind working to reduce prices of cancer drugs?

A. Reducing the prices of cancer drugs is on our radar, but we are waiting for the government's next move on this. The government also wants to make the exorbitant cancer drugs affordable, which it could choose to do either by asking pharma multinationals to reduce prices or by diluting patents. We are waiting to see which route the government takes. Patients suffer in cancer not only because of the disease but also the amount they end up spending in managing it. The government will have to find a way out over the next few months. My purpose is to not earn anything out of this portfolio, which I mean to create as a kind service for poor masses.

Q. Mankind has slashed prices of many drugs but at times faced questions around the quality of its drugs. Your comment?

A. Most of our molecules have been very cost effective. While the strategy had its merits, we also had to face some unique challenges with some people questioning even the quality of our drugs. I will quote an example. In 2003, we started marketing a drug, Mecobalamin. It was being marketed then by other multinationals in India at the rate of around .`90 an injection, we introduced it at about .`7 per injection. Then, of course, we were very small. Suddenly, the rumour market was abuzz that we were offering sub-standard drugs. Doctors and consumers do not realise that the price of bulk drugs, the main raw material to make the drug, goes down over a period of time and at times goes down very drastically, and companies many a times do not pass that benefit to the consumer. Then it took us some time to convince the doctors and diffuse their doubts. Now, most in the medical profession understand that logic well.

Q. Mankind has generated the maximum number of prescriptions this year in the domestic market. Is it only because of having the highest number of medical representatives?

A. We are now the market leader as far as prescriptions generated is concerned. Mankind today generates on an average 93 prescriptions per doctor per month while the second leader lags Mankind by almost 30 prescriptions, clocking about 62 prescriptions per doctor. It is mainly due to a difference of cost in drugs sold under our brand and other large companies. But part of it is also because we have the largest number of medical representatives and serve smaller centres, which are underserved and unpenetrated and hence face limited competition. Beyond the 10,000 medical representatives, we will continue to hire as forces of urbanisation unlock latent demand. Villages of 20 years back have turned into townships, small towns have become bigger, number of doctors have gone up and hospitals are penetrating those places faster. So there is still a need gap we are catering to.

Q. As the pipeline of original molecules dry preup, the future targets of generic companies also shrink. Is Mankind planning to diversify?

A. We have entered nutraceutical’s, a sub sector where there is a lot of growth. It is true that the pipeline of new pharmacological molecules has dried up, but there is scope for innovation in existing molecules such as new drug delivery system, introducing nano technology, encapsulation, orally disintegrating strips, transdermal drug delivery and sustained release. Again, over-the-counter (OTC) space is another area of interest which doesn't give instant returns. It is an unhurried but enduring affair. We have also been marketing deodorant under brand Addiction and leading in condoms with the brand Manforce, but have decided to largely restrict company's offerings to those related to health. This is a subject we understand best, and we will focus on that.

Q. Do you have any plans to go for a public listing?

A. In the near future we don't see ourselves listing. We are a cash-rich company. And do not have any imminent need to list.

Q. Two years after the implementation of national drug pricing policy, how has the government's move affected prices of Mankind's drugs?

A. Out of 348 medicines that figure in the national list of essential medicines, Mankind has approximately 43 molecules. Amazingly, the company did not need to cut down the prices of even a single brand and is least affected by it. Reason being, Mankind is already providing high quality medicines at economical prices, at wafer thin margins.

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