“Biocon has challenged the premise of high quality = high price”

Shukrit Chimote, Vice President and Head, Branded Formulations (India), Biocon

“Biocon has challenged the premise of high quality = high price”

Shukrit Chimote, Vice President and Head, Branded Formulations (India), Biocon | Trying to change the mindset of a country that still believes ‘imported’ and ‘superior’ are synonymous is Biocon – first Indian company to produce human insulin. To understand if the mindset has changed and to know all that’s insulin, The Dollar Business caught up with Biocon’s Head of Brand Formulations, Shukrit Chimote Shakti Shankar Patra | @TheDollarBiz

Shukrit Chimote, Vice President and Head, Branded Formulations (India), Biocon

TDB: Being the first domestic insulin manufacturer, how would Biocon describe the Indian market, which is dominated by MNCs? SC: The market for diabetes therapy in India is growing rapidly. IMS predicts India will be the 8th most valuable diabetes market in the world by 2016, up from 15th in 2007. Sales of diabetes medicines are expected to be worth Rs.22,700 crore by 2020, according to a prediction by Barclays. Although the Indian market is a highly competitive, Biocon has been steadily increasing its market share. Currently, Biocon is ranked at No.4 behind Novo Nordisk, Sanofi and Eli Lilly, thus being the leading domestic insulin player. However, from a growth standpoint, Biocon is the fastest growing insulin company, growing at 34% (as per IMS July’14 MAT). While the Indian insulin market has been a challenging one, driven by investment demands in patient acquisition, Biocon has been able to maintain its strong market growth with a focus on building brands through well-defined ‘stakeholder’ value propositions. TDB: What is the basis for your claim to be the No.1 insulin brand in India? Is it in terms of volume or value or some other parameter? SC: In the Indian insulin market consisting of close to 10 players, the MNC:Indian ratio is 50:50. Among Indian companies, Biocon ranks one in terms of both value and volume. From an overall standpoint as well, Biocon ranks one in value market growth. TDB: There’s a view that Insugen is good in clinical trials under a controlled environment but has been found wanting in a clinical state. How would you respond to this? SC: This is incorrect. Insulin as a product is titrated prior to administration based on patient requirements. It is impractical to expect that an insulin which works in a clinical setting will not work as well in a real life setting. At any point in time, there are over four lakh patients who benefit from Biocon’s Insugen in the Indian market. It is difficult to have this scale of market penetration if the product is found wanting. Biocon’s Insugen is backed by clinical trials in India and Europe. The outcome of these trials indicate that Insugen is at par with the innovator in quality, safety and efficacy. Besides being a domestic leader, Biocon also enjoys tremendous success with its insulin in international markets, where regulators have reviewed Biocon’s clinical data and approved the product for patients in over 55 countries. Furthermore, it is important to reiterate that as India’s first indigenous insulin manufacturer, Biocon has been addressing a very large need for affordable insulin therapy in the country through its generic rh-insulin brand Insugen® and insulin analog Glargine brand BASALOG®. TDB: Give us a sense of Biocon’s pricing power in India when it comes to insulin. SC: Although insulin is under price control in India, prices of imported insulin brands are higher than indigenous brands like Biocon’s Insugen, as the government has a higher ceiling price for imported products. Even in the analog insulin segment, Biocon is more affordable than its competitors. Biocon has continually strived to make diabetes management affordable for patients in India. TDB: Would you call the NPPA’s policy vis-à-vis insulin imports fair? How has it impacted domestic prices? SC: The NPPA’s policy has defined a lower ceiling price for indigenous insulin vis-à-vis imported products. Unfortunately, in reality, many of these companies are using this price differential to mislead users by establishing that imported products are superior in quality as compared to indigenous products and hence, are expensive. Considering that margins for imported products are decided based on the landing cost of these products, the production cost of imported medicines should be verified and not just be based on the company’s data. A company like Biocon has made huge investments towards research and development of this product as well as setting up world class manufacturing capabilities to ensure that the product quality is comparable with global best standards but keeping the cost at an affordable level thus challenging the premise of ‘high quality = high price.’ TDB: The import duty on insulin in medicine form is lower than that of insulin and insulin salts. Is it in some way a reflection of domestic incapability to cater to demand? SC: Biocon does not import insulin, hence would not like to comment much on the difference in import duties. But it is suffice to say that differential import duty has existed for a long time and has no relation to capacities of local Indian manufacturers. Biocon has invested heavily in expanding insulin manufacturing capacities at Bangalore in order to cater to growing demand of its rh-insulin. Considering the fact that Biocon is exporting insulin to several countries, it has sufficient volume to cater to domestic needs. Additionally, the company has also invested $200 million in setting up Asia’s largest integrated state-of- the-art drug substance and drug product insulin manufacturing facility in Malaysia. This additional capacity, once ready, will enable catering to the growing global commercial footprint of Biocon. TDB: Give us a sense of your insulin exports in terms of geographical spread, margins and volume. SC:Biocon’s rh-insulin is approved in over 55 countries and Insulin Glargine is approved in over 10 countries. Biocon does not comment on margins and volume.

“Biocon has challenged the premise of high quality = high price”

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