European drug major GlaxoSmithKline (GSK) has said its business strategies in emerging markets, including India, will be driven by its supply partnerships with generic companies such as Dr Reddy’s here and Aspen of South Africa.
The generic focus is important, as GSK believes only 10-15 per cent of India’s pharmaceutical market will account for patent-protected medicines even after a decade from now, Abbas Hussain, its president, emerging markets, said in a recent teleconference.
“If you look at the largest individual product in India, it is worth £20 million (Rs 150 crore). Therefore, if you want to build a business in India, for instance, of £500 million-plus (Rs 3,900 crore), you will need to have at least 100 or so brands to be able to do that,” Hussain said.
The tie-ups with Dr Reddy’s and Aspen turn significant in this backdrop. GSK intends to become a scale player in emerging markets through a broad portfolio of what it calls “classic brands”, or branded generics.
Terming its partnerships with Aspen and Dr Reddy’s as “innovative”, Hussain said once the products from these companies get registered, GSK will have a very large portfolio offering for the emerging markets’ healthcare systems.
The company is also expecting its vaccine business to grow fast, as emerging markets have high birth rates as compared to matured or developed markets. “GSK has the broadest range of both paediatric and adolescent vaccines to offer. The vaccines market in emerging markets is worth approximately £1.6 billion (Rs 12,127 crore), it is growing at 25 per cent and GSK has the largest market share, in excess of 28 per cent. We want to continue to build on that,” Hussain added.
‘Emerging markets’ for GSK are the whole of Latin America, Africa, West Asia, Russia and the CIS, India and China. The total business in these markets in the year to September was in the region of £2.1 billion (Rs 15,922 crore) and we were growing at 19 per cent, which constituted approximately 13 per cent of GSK’s global sales, he said.
