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Sound Strategy
Published in PROFILE No. 6 February 2009
Domestic generics of well-known world brands continue to gain confidence of doctors and consumers in the pharmaceutical market. Moreover, the price factor does not always play the leading role in this process; - says Elena Palevskaya, CEO of Promo-Med. In their qualitative characteristics Russian medications are able to compete not only with import generics, but also with the originals.
- Generics have always been viewed suspiciously on the Russian market. At the same time, the market of analogs in the whole world, including our market, is growing with the priority rates in the latest decade. The global financial crisis and the strategy of import substitution have given one more strong impulse to the development of this segment. How does change the attitude of Russians to generics?
- It s not a secret that 15 years ago, as long as more than 200 west pharmaceutical companies opened their representative offices in Russia, there has been a deliberate persuasion of doctors and patients that «west», «original» - is better and cannot be compared in effectiveness with the unlicensed analog. This slogan is perfectly laid down on the post-soviet mentality of Russians. Brand, original - means expensive, thus the western pharmaceutical companies sometimes justified the 10-fold higher prices for their product, in comparison with analog, which can be purchased from the producer of generics. There were some objective reasons for this: we all remember how formerly in the drugstore bright colorful packaging and shiny luring blisters from Western manufacturers adjoined to paper packaging with crumbling sometimes turned yellow pills of any “chempharmfactory”. But in recent years, after the Federal Service for Supervision of Health and Social Development took a course on hardening of requirements for the quality of production in Russia and adapting of all production until 2010 on common standard of GMP (good manufacturing practice), the situation with the quality of production in Russia has changed significantly. Today the large part of the factories in Russia, which already produces actually qualitative medications, is created from the ground or radically reconstructed. The dynamics of the pharmaceutical market shows that consumers attitude to generics and to the domestic producer as well is changing quickly for the better.
- Nevertheless, would you agree that the price factor often plays a major role in choosing the generic? And brand s supporters have a strong argument - clinical research on which the producers of generics economize.
- This is true only in part. Experience of our company in products promotion proves that the high quality of product and literate marketing, and not just the price - the way to winning the confidence of consumers. First, in Promo-Med we initially made a bet on promotion of the first generics. This approach allows forming price, focusing on the brand only. Second, obligatory term of the drug s release on the market is its own clinical research, which finally convince doctors and pharmacists in the high quality of product. The leading specialists from various branches of medicine gather probative base, and their work s results are published in the reputable medical editions and are represented on specialized international symposia. It turns out that on the basis of branded medicines it is possible to create not only the rivals in quality, but the superior medications in efficiency. So in 2005 we launched on the market with the first generic of Smecta (Beaufour Ipsen International s production, France) - Neosmektin, which only in ten months has captured the 3.4% of Smecta s market share. So the same is happened with our other product - a remedy for treatment obesity - Reduxine. In the development of preparation, scientists have deduced such a formula of filling tablet that in its properties the drug has become possess a softer effect in attitude to all possible side effects. The company drew to the research all leading scientific centers of Russia, which have prepared an excellent probative base. The medicine appeared on the shelves of pharmacies on the next day after the expiration of patent protection for brand. By price Reduxine is close to the original, but it is more available and shows better sales dynamics. According to the Pharmexpert data, the increase of Reduxine sales in the fourth quarter of 2008 in comparison with the same period in 2007 is 62%, and this is against the backdrop of the general market decline of drugs for weight reduction. I think that s pretty optimistic results, especially in consideration of fact that the sales of our two nearest competitors, original products, fell down to 14 and 39%.
- How much such business approach is typical for companies creating generics in Russia?
- On the market of generics Promo-Med is the only Russian company, engaged in clinical research. From the first days of its work the company has set the major task - scientifically prove not only the therapeutic efficiency of each output preparation, but also its complete safety in accordance with the requirements to the original means. It s expensive, but we intentionally chose this path. We have enough resources not only to produce high quality, but also professionally promote our product. As a rule, the producers are guided by a simple logic - to create another one generic of the popular brand, to fall in price and promote it as «the same as the original, but at half of the price». It s not interesting for us to work like this, neither from a business standpoint, nor from the professional side.
- Elena, from a business standpoint, what niches of pharmacology seem to be the most promising today? What is your company s approach to the formation of portfolio?
- Product portfolio - the basic problem of all pharmaceutical companies. There is no possibility and necessity of aiming to cover the maximum number of market segments by its own products range. The main thing - to see which product is in demand. In Promo-Med works the innovation marketing department, which conducts research and market analysis. Forming our own portfolio, we rely on professional experience, knowledge and vision of the market. So we focus on socially important niche. Let s take «Reduxine» - medicine for reducing weight. Besides the purely medical aspects the problem of excess weight affects the personal socialization. Today the quality of life, professional achievements are directly dependent on the form in which you are, how you feel physically and psychologically. Another example - in our assortment the medicine “Sirbida” for treatment erectile dysfunction is also presented. It is demanded by men for whom it is always important to feel and to be sexually active under any circumstances, even despite the crisis. The sexual and social potency are known to be interrelated. In other words, we try to promote drugs which not only relieve pain or reduce pressure, but also provide positive influence on quality of human life.
- Obviously, the business strategy of Promo-Med is pretty unusual for the Russian pharmaceutical market. What motivates you to make your own way in business?
- The purpose of our team - creation and maintenance of the image of the Russian pharmaceutical brand as a new product category - affordable, trustworthy of consumers. From our point of view, it is important for this that the quality of products promoted by Promo-Med was confirmed by clinical studies. We follow only ethical business. This is the question of principle for our company. Look who is working here.
Angelica Belmeseva - sales director. She has the experience in the pharmaceutical company Hoffman La Roche and AstraZeneca, where in 2007 she became a manager of the year, and her team showed the best result in sales. As for me - twelve years with the company GlaxoSmithKleine, the best business manager in 2000 and AstraZeneca.
Elena Petrunichkina - commercial director, more than 9 years of working in a national pharmaceutical distributor Apteka-Holding (Alliance Healthcare Russia).
Orest Ibragimov has been working for fourteen years on the pharmaceutical market, ten years in the company Yamanouchi Europe BV (Astellas) and 4 years in the pharmaceutical enterprise Obolensky, which entered the top 10 among Russian pharmaceutical producers by Pharmexpert rating of 2007.
Elena Krestyashina, Medical Director, has experience in pharmaceutical business since 1997, including eight years in the medical department of F. Hoffmann-La Roche, two years in the international contract research organization Quintiles, as the head of the clinical projects.
The entire managing staff of Promo-Med consists of the western corporations representatives having been recommended in the past. We know from the firsthand how the image of a reliable, reputable company is generated in the world pharmaceutical market. We try to move onto Russian soil the experience having been gained over the years in the leading global pharmaceutical companies. We can say that we are the first Russian company with a foreign face.
- As far as the Russian market is ready to accept the principles of Promo-Med work? How do you look for reliable partners who would share your business standards?
- The company is proud of its partners by right. There are only the best national and international companies among them, valuing their names and offering products and services of the superior quality. Such famous companies as NCPharm, Russia Inform, Pharmstandart and PharmProject, Moscow endocrine factory, Samara Factory Ozone and an advertising agency Matrix are working closely with our company. The result of this cooperation is sales rising of high-quality products promoted by Promo-Med.
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