Budget 2018: Pharma Companies Want A Push On Research, Innovation

The government needs to seriously re-think the ways to promote research and innovation in the country, especially within the Indian pharmaceutical industry. This seems to be coming across as a clear message from the various stakeholders in the Indian pharmaceutical industry.

Perhaps, some of it has to do with the mood within the industry driven by the changing market dynamics in the two most important markets – the US and India, and the fact that most recent budgets have been largely disappointing for the sector.

Many companies, with some leading players, are already coping with challenges around price erosion in generics, erosion of base business resulting from new competition and buyer consolidation in their biggest global market, the US. They clearly see the writing on the wall: Moving up the value chain in terms of developing niche, hard to replicate products, is the only way out and are gearing up for that, with some already moving ahead in this journey.

This is one reason why most that Business Today spoke to were unanimous in picking research and innovation as the top item on the list of priorities for the sector. But then, given that research spending in the pharmaceutical industry is a risky proposition, especially in areas of drug discovery and innovation, fiscal incentives could provide the necessary fillip.

For instance, it is very likely that even after spending 10 years investing in research, the product may finally not get a regulatory approval. “If you want to promote innovation then incentivize investments into research and innovation. This could be done either by government offering a matching grant to a private enterprise or by extending a tax credit,” says D G Shah, secretary-general at the Indian Pharmaceutical Alliance, that has leading Indian pharma companies as its members.

He feels the tax credit could be spread over a period of two to three years also. This backed by some procedural simplifications, say around ease in filing of patents, could go a long way in encouraging research, he feels hoping the Union Budget would address this issue.

In fact, Kiran Mazumdar-Shaw, chairperson and managing director, Biocon, goes a step further and says, if India needs to move the needle with respect to its goals around Making in India and carving out a niche for itself globally, it needs to support research and innovation.

“India needs to spend at 2 to 3 percent of GDP on science and research as against the 0.69 percent at present,” she says.
According to a recent report by the department of science and technology, India’s gross expenditure on R&D as a percentage of GDP for the last couple of years has been at around 0.69 percent.

But then, if funds are an issue, her suggestion: perhaps the government could look at deploying collections made from the R&D cess. There are enough media reports on the over Rs 7,000 crore that have have been collected by way of R&D cess.

This is crucial, she feels and points to a recent report by the European Commission which says that if you increase R&D investment by 10 percent in public research institutions, it grows the GDP by 1 percent. This coupled with a focus on meritocracy could go a long way in the Indian context, she feels.

Kiran Mazumdar-Shaw and others in the pharma industry, while not in favour of the government move towards gradually doing away with the weighted deduction on R&D for the private sector, want its scope expanded to all areas connected with R&D.

This is despite the government’s roadmap that seems to favour a move towards a system where there is a reduced corporate tax rate with all the deductions eliminated, apparently to make it all simple.

“The budget should ensure that the weighted deduction on R&D is brought back (from 150 percent) to 200 percent and its scope expanded to cover various nuances of R&D such as in-house intangible asset development, expenditure on R&D facility, clinical trials by CROs (contract research organisations),” says Kedar Upadhye, Global Chief Financial Officer at Cipla, a global major pharma player with significant presence in the Indian market.

That apart, there is also an expectation that perhaps the budget would look at clearing some of the issues around GST payment, especially in cases where medicines cannot be sold, either on account of being damaged or for crossing their expiry date.

This article originally appeared in Business Today

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Cipla Announces Q4 & FY18 Results

Press Release

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Cipla Limited (BSE: 500087, NSE: CIPLA) today announced its audited consolidated financial results for the full year and quarter ended March 31, 2018.

The Company reported full year revenues of Rs 15,219 crores, growing 6%# y-o-y. EBITDA margins, before exceptional items, increased by over 160bps to 18.6%. For the quarter ended March 31, the Company reported revenues of Rs 3,698 crores, growing 5%# y-o-y. The R&D investments in the quarter ramped up to ~7.6% of revenues. Key markets including India and South Africa continued to deliver strong growth.

“This financial year, our focus remained on strengthening our portfolio and deepening our presence in priority markets. We are happy that our efforts on cost and efficiency improvement helped us deliver the full year margin ahead of our guidance range. Our focus for next year will be to continue our growth trajectory in key markets and investments in portfolio for sustainable growth. We continue to strive to make a difference to patients through meeting unmet needs and our continuing focus on quality & innovation”

– Umang Vohra MD and Global CEO, Cipla Ltd.

Overall P&L (in INR Cr)

Performance Highlights

  • FY18 EBITDA, before exceptional items, grew by 14.2% on a year on year basis with PAT growing by 40% .
  • Strong momentum continues across key markets with India business delivering a strong quarter with growth at ~21% (GST Adjusted) y-o-y. South Africa, API, Europe and Sub-Saharan markets continued strong momentum. The US business saw launches of key products.
  • South Africa business delivered yet another record quarter of R1bn+ sales (adjusted for one-offs) recording 18% growth for Q4 vs last year in US$ terms.
  • Strong pipeline maintained during the year with 24 new filings during the year.
  • Focused efforts towards building a strong Specialty portfolio for US. Steady progress in development of Tizanidine patch.
  • R&D investment for this quarter stood at ~7.6% of revenues. Increase was driven by clinical trial charges related to Advair among others.

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How Cipla’s Self-Learning And Continuous Learning Approach Is A Game-Changer

Learnability is the biggest skill one can possess in the hyper-dynamic times that we exist in. There is a need for people to quickly learn and unlearn, and re-invent themselves if they seek to survive in the professional arena. At the same time, owing to how automation and technology are changing the nature of jobs, even organisations need to focus on continuously adding to the knowledge and skills of their people to stop them from becoming redundant. Gone are the days when learning and development were seen as a cost burden. It has now become essential for businesses that seek to sustain and grow in the existing volatile business scenario.

Cipla has been transforming its approach towards learning through focused efforts by its learning and development arm, Cipla University. In line with its philosophy of continuous learning, Cipla University believes in offering best-in-class training while promoting continuous learning that would enable all its associates as well as the organization on the whole Learn-Excel-Grow in a regular manner. This would not just lead to performance excellence in the present, but more importantly make individuals and the organization, future ready as well.

Hemalakshmi Raju, head- learning and development, Cipla says, “It’s not knowledge but a continuous learning approach that provides a competitive advantage.”

Raju shares that the organisation observed that there was a hunger for learning, and people needed guidance to be more efficient at what they do. More so, as the sales representatives in the pharmaceutical industry are mostly on the field and spend a significant amount of time, on-the-go. In addition, they have to deal with people who are way more qualified than them — the doctors. Even more challenging is the fact that their interaction window is limited to a few minutes versus the wait time that may be an hour or more.

It’s not knowledge but a continuous learning approach that provides a competitive advantage.

“Keeping all these challenges in mind, we realised that the field force required learning on the go such that they have anytime, anywhere access to relevant content. We launched mobile learning for the field force, a year ago. It allows them to utilise their wait time for learning, along with constant self-assessment on the same,” Raju explains.

The Company follows the 70:20:10 principle for its learning initiatives, and focuses majorly on continuous learning and self-learning. It has a unique programme called ‘Keep educating yourself’, under which it has provided its people access to a set of curated MOOCs. ‘My learning challenge’ is another unique initiative, that was organized sometime back, wherein employees could enroll themselves, pick a topic of their choice and spend at least half an hour every day, for ten days, learning the same.

Raju shares that over 250 people had enrolled for this programme across the globe, of which the best 10 were selected as learning champions. “The idea behind all these initiatives has been to inculcate in our people a habit of learning on their own,” Raju opines.

Cipla recently organised a learning expo at its office in Mumbai, with an aim to encourage self-learning and learning on the go. The event attempted to sensitise people and orient them to utilise various tools for self-learning through gamification.

Raju shares that the buy-in from the top management towards these digital learning efforts is extremely high and Cipla’s CEO, Umang Vohra and group chief people officer, Prabir Jha are strong proponents and ambassadors of the same

Looking ahead, Cipla is planning to organise social-learning drives, through digital platforms. It will include strong peer-to-peer learning through ‘tag and learn’ initiatives.

“Learning is not just about individual capability building but organisational capacity building” is a strong perspective held by Jha and Raju feels that Learning On the Go will be a key lever in bringing this alive.

This article originally appeared in HR Katha.

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5 Ways To Create A Positive Image At Work

Employees who exhibit positive behaviour at work not only tend to be more productive than others but also encourage others to push themselves harder.

Here are tips from experts on how to wear just the right attitude at work.

1. Organisational Culture

Every organisation has its individual work culture. “As an employee, do your best to understand the values behind it and try actively to be part of it,” says Sashi Kumar, managing director, Indeed India. “You must demonstrate willingness to work towards the company’s goals and its larger vision.

2. Be Vibrant & Lively

Don’t be dull at the workplace. “Show energy, initiative and enthusiasm. This strength is infectious and attracts people. Conversely, cynicism, cribbing and endless moaning destroy your image,” says Prabir Jha, global chief people officer, Cipla.

3. Company Counts

Never forget that the people you hang out with define you in a way. It is very important to keep the right company. “Be seen as one who attracts good talent and works with high-performers. You do get a positive rub-off from this,” says Jha.

4. Be Meticulous

“Staying on top of your assignments will not only help create a stress-free environment for yourself and others working with you but also allow leeway for you to explore new avenues of work,” says Kumar. “Everyone loves a person who consistently over-delivers,” says Jha.

5. Go the Extra Mile

“Positive thinking, even in difficult situations, can help showcase your professional maturity to supervisors and garner trust from your colleagues. Having an approachable manner can encourage peers and subordinates to seek advice,” says Kumar.

This article originally appeared in the Economic Times.

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Cipla Partners With Mannkind For Exclusive Marketing, Distribution Of Afrezza®, Innovative Inhaled Insulin

Press Release

Cipla Limited today announced that it has entered into an exclusive marketing and distribution agreement with US-based MannKind Corporation for Afrezza® in India. Afrezza® is the only USFDA approved inhaled insulin available for patients suffering from diabetes. “Cipla is committed to providing access to innovative medicines and newer drug delivery systems to the patients. Afrezza, an inhaled insulin, is a cutting-edge product which will increase patient convenience,” said Umang Vohra, MD & Global CEO, Cipla Ltd. “The innovative drug delivery system will revolutionize the diabetic care in India. This partnership with MannKind is another step from Cipla to cater to the unmet needs of the patients.”
“Our agreement with Cipla for Afrezza provides us with a long-term partner with a wealth of knowledge and experience in diabetes. Cipla is a leader across therapies in India with an established sales, marketing and distribution network. With this partnership, Cipla will leverage its strength in inhalation and extend it to diabetes therapy, stated Michael Castagna, Chief Executive Officer of MannKind. “The International Diabetes Federation estimates that 425 million people are currently living with diabetes worldwide, including 73 million in India. This agreement with Cipla, our second international partnership agreement for Afrezza, extends the potential opportunity for approximately 1 out of 4 people of the worldwide population with diabetes to manage their disease with our novel mealtime insulin, when combined with our earlier agreement in Brazil and our own efforts in the United States.” Under the agreement, Cipla will be responsible for obtaining regulatory approvals to distribute Afrezza® in India, including approval from the Drug Controller General of India (DCGI). Cipla will also be responsible for all marketing and sales activities of Afrezza in India. MannKind is responsible for supplying Afrezza to Cipla.

About Afrezza®
Available by prescription, Afrezza® (insulin human) Inhalation Powder is a rapid-acting inhaled insulin indicated to improve glycemic control in adult patients with diabetes mellitus. Afrezza consists of a dry powder formulation of human insulin delivered from a small and portable inhaler.

Administered at the beginning of a meal, Afrezza dissolves rapidly upon inhalation to the lung and passes quickly into the bloodstream (in less than one minute). This rapid absorption allows Afrezza to begin reducing blood sugar levels within about 12 minutes of administration. Afrezza is available in 4-unit, 8-unit and 12-unit single-dose cartridges of insulin powder that can be used, as prescribed by a health care professional, in combination with other diabetes medications to achieve target blood sugar levels. For Afrezza doses exceeding 12 units, patients may use a combination of existing cartridge strengths. For more information on Afrezza, please visit www.afrezza.com

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