GSK India clones local strategy

Deviating from the global business strategy of its UK parent, GlaxoSmithKline Pharmaceuticals India, the largest multinational drugs company in the country, is planning to sell in India drugs that are off patents globally.

These drugs could either be from the GlaxoSmithKline Plc stable or owned by other multinationals.

"This is our unique India-specific strategy," S Kalyansundaram, managing director, GlaxoSmithKline Pharmaceuticals, told Business Standard recently. The company is also looking at entering into "in-licensing" agreements -- acquiring the rights to hawk other companies' drugs -- to launch patented drugs in India.

Most Indian pharmaceutical companies have been selling generic drugs worldwide once the patent expires. GSK India seems to be taking a leaf out of their books and adopting a similar strategy in India.

The other researched-based multinational pharmaceutical company that has adopted a similar strategy is Novartis AG, which has a generic arm, Sandoz. But Novartis is doing it globally.

Mehernosh Kapadia, GSK Pharmaceuticals' finance director, told Business Standard on e-mail: "GSK India's business strategy is not with a view to making a foray into the generic drugs business. The company has chosen to enter chronic therapeutic segments such as diabetes and cardiovascular. The products could either be from GSK Plc, the parent company's pipeline, or through in-licensing arrangements with innovator companies to bring in novel products that have significant therapeutic value. This approach will be complemented by the introduction of patent expired products, wherever applicable, which continue to remain relevant in the domestic market."

Kapadia added: "This business strategy will continue to meet portfolio gaps and is also aimed at bringing in products that are under patent protection after 1995. This business strategy, which is specific to GSK India's domestic business, is endorsed by its parent, GSK Plc."

A Mumbai-based pharmaceutical industry analyst said it was a positive development. "The critical issue, however, is the identification of product categories," he said.

GSK India plans to soon launch Rosiglitazone and Metformin combinations in the anti-diabetes category and the anti-ulcer drug, Rabeprazole, besides vaccines, all part of its UK parent's portfolio.

The analyst said the Rs 1,480 crore (Rs 14.8 billion) company expected products that were launched in the last two years to contribute Rs 100 crore (Rs 1 billion) in revenues in calendar 2005.