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Ranbaxy’s Future in Sustainable Healthcare
Team B1 – Equilibrium Consulting
2
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Roadmap to Success
Situation Analysis
Alternatives
Recommendation
Financial Impact
Implementation
Wrap-Up
3
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Our Understanding
India has highest industry growth in emerging markets (12-14% per year) India, Brazil, Russia, China
Strong profitability potential from NDDS research and development New dosage form licensed to Bayer
AG for $65 million
Dependence on generic drugs leads to volatile profitability 2008: $215.5 million loss due to
inventory write off
2010
2011
2012
2013
2014
2015
$-
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
Indian Pharamaceutical Industry Growth
Bill
ion
s o
f U
SD
12.3% Compound Annual Growth
Your Growth Potential
4
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Roadblocks to Success
Challenges
How to achieve higher levels of synergy
How to promote quality control
How to move towards sustainabilityCompetition
Increased presence of generic players
in developed markets
Supply Chain
Challenges faced as a result of
acquisition
Regulator Authorities
Immediate Threat:FDA import ban in the US
Threats to Revenue Streams
5
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Opportunity Statement
By introducing Daiichi’s patented drugs into India,
optimizing quality assurance, and increasing R&D focus
on NDDS (Novel Drug Delivery Systems) Ranbaxy will
leverage synergies with Daiichi by addressing quality
control, in addition to taking advantage of all available
opportunities associated with the ‘Hybrid Business
Model’. The 7-year implementation of this recommendation
will generate an NPV of $1.5 to $2.5 billion.
6
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Categorizing Your Challenges
Current Road Blocks Future Growth
What can be done about import ban?
Achieving Better Synergies
Sustainability
2 Key Areas
7
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Categorizing Your Challenges
Current Road Blocks Future Growth
What can be done about import ban?
Achieving Better Synergies
Sustainability
Acquire new producers / build plants
Lobby FDA for timely resolution
Strengthen quality control
processes
+/--
+
2 Key Areas
8
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Categorizing Your Challenges
Current Road Blocks Future Growth
What can be done about import ban?
Achieving Better Synergies
Sustainability
SupplyChain
Sales/ Mrkt
Qlty Mgmt.
Acquire new producers / build plants
Lobby FDA for timely resolution
Strengthen quality control
processes
+/--
+
2 Key Areas
9
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Categorizing Your Challenges
Current Road Blocks Future Growth
What can be done about import ban?
Achieving Better Synergies
Sustainability
SupplyChain
Sales/ Mrkt
Qlty Mgmt.
Market Growth
Market Share
Revenue Streams
Are we in the right
markets with the right
products?
Is our R&D best suited to
serve our long-term
needs?
Acquire new producers / build plants
Lobby FDA for timely resolution
Strengthen quality control
processes
+/--
+
2 Key Areas
10
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Categorizing Your Challenges
Current Road Blocks Future Growth
What can be done about import ban?
Achieving Better Synergies
Sustainability
SupplyChain
Sales/ Mrkt
Qlty Mgmt.
Market Growth
Market Share
Revenue Streams
Are we in the right
markets with the right
products?
Is our R&D best suited to
serve our long-term
needs?
Acquire new producers / build plants
Lobby FDA for timely resolution
Strengthen quality control
processes
+/--
+
Non-Negotiable Decision Criteria
Questions our Alternatives need to Address
2 Key Areas
11
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Alternatives
Alternatives
1 Generic drugs, Emerging markets
2 Generic drugs, Developed markets
3 Innovative drugs, Emerging markets
What markets? Emerging or Developed
What products? Generic or Innovative
Market Mix
Type of Products
Generic
Developed Emerging
Innovative
Increase generic products in India, South America, Vietnam, China
Increase generic products in USA, Europe, Japan
Market innovative drugs in countries like India, South America, Vietnam, China
12
3
12
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
The Path Forward
Generic in Emerging
Generic in Developed
Innovative in Emerging
Sustainability +/- - + +
Profitability +/- +/- +
New Synergies - - + +
Actionability + + +
Low level of risk +/- + + +
13
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Recommendation
Quality Control
Committee
Streamline R&D Focus
Bringing Innovative Drugs to
India
Sustainability
Syne
rgie
s
Low High
High
Target
14
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Quality Control Committee
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
Quality Control Committee Optimization Committee currently in place, headed by Mr. Dale Adkisson
What they do: set internal guidelines
Take it to the next level: Add “honesty and integrity” to corporate culture – Mr. Adkisson should
propose this to the executive board (umbrella term for quality assurance) Includes: Ethical Research/Data Collection Ethical behaviour of sales representatives
Verification by External Audit group: 3rd party: make sure that rules/regulations relating to Quality control are being
followed Ensures no conflict of interest
15
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Move Into India
Innovative Drug Producers only occupy 5% of the pharmaceutical industry (will increase to 10%)
There is a void in what your group of companies supplies to emerging markets in terms of innovative drugs
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
Why bring Daiichi brands to India?
Market Mix
Type of Products
Generic
Emerging Developed
Innovative
16
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Products of Daiichi Sanko
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
What brands should we focus on?
Rise
in L
ifest
yle
Dis
ease
India in 5-10 years
Given the rise in lifestyle disease across the Indian demographic a market is developing for the following type of innovative drugs Cardiovascular Disease Hypertension Diabetes
17
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Products of Daiichi Sanko
Benicar (high blood pressure) WelChol (reduce cholesterol) Effient (heart disease) Mevalotin Loxonin Hirudoid Olmetec Captopril Panipenem Cravit Evoxac FloxinOtic Gracevit
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
What brands should we focus on?
18
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Pharmaceutical Marketing
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
3 Key Issues: Low level of customer knowledge Number and quality of medical reps Poor customer acquisition, development and retention strategies
Health care providers Medical representatives
Backbone of entire marketing effort Collaboration of “Associations of
Physicians of India” (API) Trade booth/medical
fairs/seminars
Who to target
19
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Daiichi-Sankyo Medical Representatives
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
Objective Retrain Ranbaxy Sales Reps SalaryDevelop Rapport with Healthcare
Providers
Action Required
Brand and product knowledge Customer education & retention Focus on customer service 5 reps for each region (Delhi,
Trivandrum, Jalpur, Rohtak)
Compensation-based
Consistent meetings to build relationships
Drug Samples Invitation to
Daiichi Medical Conference
Addressing Your Medical Sales Representatives
20
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Daiichi Medical Conference
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
Sample Flyer for Doctor’s Seminar
21
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Narrowing Focus of R&D
Create synergies in R&D between Ranbaxy
and Daiichi
R&D in India is nearly 50% less than other
countries
Ranbaxy developments will help create line
extension for Daiichi that will serve to extend
their product patents with Abbreviated New
Drug Applications (ANDAs)
Financial incentive: Ranbaxy can profit from
licensing R&D to Daiichi
Objective: Streamline R&D activities to focus mainly on Novel Drug Delivery Systems (NDDS)
What this accomplishes
Orally administered, controlled-release
Inhalation
Trans-dermal (patches)
New NDDS methods
1. Optimize Quality Assurance
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Projected Sales and Costs
22
Pharmaceutical Market$20 billion
Generics90%
Innovative10% - $2 billion
Ranbaxy3% - $60 million
Other Firms97%
Transfer Pricing
28% of revenues10% premium
Selling, General & Administrative
Expenses
15% of revenues
Marketing Expenses
$8.5 million$3 million / year
Costs
Sales (2015)
$20 billion
$2 billion$60 million
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Financial Implications
23
2012 2013 2014 2015 2016 2017 2018
$(40,000,000)
$-
$40,000,000
$80,000,000
$120,000,000
$160,000,000
Net Cash Flows (Sensitivity Analysis)
Base Case Pessimistic Optimistic
Mill
ion
s o
f US
D
$1.5 billionNET PRESENT VALUE(=6.5 times 2010 Profit)
$2.5 billionNET PRESENT VALUE(=11 times 2010 Profit)
Growth12.3% pharmaceutical
industry growth per year
Cost of Capital13%
Assumptions
Market Share5% innovative drug market
share by 2018
24
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Implementation
Q4 2011 2013 20162012
Short Term (present-2012)Quality Control- Core Value - Quality Control Seminar- External auditing group
Innovative Products in India- Acquisition of Daiichi products- Establish distribution logistics
Medium Term (2012-2014)Quality Control- Continuation of external auditing and bi-annual visits
Innovative Products in India- Training of Medical Sales Representatives- Daiichi Medical Conference- Products launch- Reevaluate and extend product offerings
2014 2015
Long Term (2014 onwards)NDDS- Research and develop TechnologyQuality Control- Continuation of external auditing and
bi-annual visits
Innovative Products in India- Revaluate and extend product offerings
25
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Risk Mitigation
• Ensures that road blocks like import ban do not occur again
• Sets universal standards that can be applied to 11 plants worldwide
• Pre-emptive action
Quality Assurance Optimization
• Effectively leveraging synergies in: Supply Chain, Marketing & Sales, Quality Control between Daiichi and Ranbaxy
• No additional learning/adaptation costs• Existing Products in New Market; established distribution
channels
Daiichi Patented drugs to Indian
Market
• Expanding range of products/services• Able to further penetrate both developed/developing markets
(new products)• Less focus on volatility of reverse engineering
Increased focus on NDDS (R&D)
26
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
3 Key Takeaways
Quality Assurance
Optimization
Introduce Daiichi’s patented
drugs to India
Profitable GrowthHigh Quality Products
Increase Ranbaxy’s
R&D focus on Novel Drug
Delivery Systems (NDDS)
7 year project generating
$1.5 to $2.5 BillionNPV
Ranbaxy will:1. Benefit from increased synergies
2. Ensure the sustainability of the ‘Hybrid Business Model’
Sustainability
Syne
rgie
s
Low High
High
27
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Slide IndexOur Understanding
Our Understanding
Roadblocks to Success
Opportunity Statement
Alternatives
Categorizing Your Challenges
Alternatives
Decision Matrix
Recommendation
The Path Forward
Quality Control Committee
Move into India
Products of Daichii Sankyo
Pharmaceutical Marketing
Medical Sales Representative
Daichii Medical Conference Pamphlet
Narrowing Focus of R&D
Financial Information
Projected Sales and Costs
Financial Implications
Implementation
Risk Mitigation
Wrap-Up
Key Challenges
Mitigate Import Ban
Synergies
Clarifying Synergies
What Provides LT Sustainability
Pharmaceutical & India Analysis
Pharmaceutical Value Chain
Generic Drug Consumer Profile
Patented Drug Consumer Profile
CVD & Hypertension
Competitor Analysis
Why India - Growth of Indian Population
Implementation
Detailed Overall Implementation
Detailed Short Term Implementation – Content
Detailed Short Term Implementation – Visual
Quality Assurance Committee Implementation
Financial Information
Projected Sales (Pessimistic)
Projected Sales (Most Likely)
Projected Sales (Optimistic)
Revenue for Daiichi Sankyo
Net Present Value Model
Quality Control Costs
Recommendation Details
NDDS: Why?
Benicar, WelChol and Effient
Value Proposition: Daiichi
Value Proposition: Ranbaxy
Synergy Office
Externalities
Corruption
What is Sustainability in this Context?
Why Not Generic? – Ranbaxy Market Penetration
Incentive for API
Hedging
Triple Bottom Line
28
Financial Information
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Projected Sales (Pessimistic)
29
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Projected Sales (Most Likely)
30
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Projected Sales (Optimistic)
31
.
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Revenues for Daiichi Sankyo
Transfer pricing model
Ranbaxy purchases drugs from Daiichi at cost plus 10% premium
Ranbaxy is a subsidiary of Daiichi Sankyo
32
$70 - $130 millionNPV for Daichii Sankyo
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Net Present Value Model
33
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Quality Control Costs
34
Cost Amount
Training Seminar $1,250,000
Information Materials $200,000
Online Media $150,000
Total $1,600,000
• $1.4 million dollar investment into Quality Control
• Funded with cash (currently $550 million in cash and bank balances)
35
Key Challenges
36
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Key Issue: FDA
How to mitigate import ban issue?
Acquire /Build New Production Facilities
Implement Internal Quality
ControlSustainability - ++
Capability of existing Infrastructure - +
Ease of Implementation +/- +
37
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Key Issue: Synergies
Supply Chain Sales & Marketing
Quality Control
Ease of Implementation
++ +/- ++
Maximizing Efficiency ++ + +/-
Cost Savings ++ + +
Leverage Industry Opportunities
++ +/- -
How do we effectively leverage synergies between Daiichi and Ranbaxy?
38
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Leveraging Synergies
R&D AIP Manufacturing
Secondary Manufacturing
& PackagingDistribution
Consumer Sales/Marketi
ng
Ranbaxy leveraging Daiichi’s investments in R&D:-Established Patented Products-Product Mix:
Daiichi leveraging Ranbaxy’s increased R&D focus on drug delivery-Extending Patents on products-Outsourcing part of the R&D process
Daiichi leveraging Ranbaxy’s established distribution channels (Patented Drugs):-Market Knowledge + Access-Consumer Knowledge -Customer Loyalty
Ranbaxy leveraging Daiichi’s established distribution systems in developed markets (drug delivery systems):-Japanese Market
Daiichi leveraging Ranbaxy’s sales representatives-Marketing/Sales of Patented Drugs
Ranbaxy leveraging existing brand equity of Daiichi products-Product Mix:-Awareness/Brand Loyalty
.
39
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Key Issue: Sustainability
Expand into New Geographic Regions
Product Line Development
Streamlining R&D processes
Profitability ++ +/- +
Long-term Growth ++ + +
Core Values + + +
Leverage Industry Opportunities
++ +/- +
What alternative provides a long term sustainable strategy for both Daiichi and Ranbaxy?
40
Pharmaceutical and India Analysis
41
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
The Pharmaceutical Value Chain
Drug Manufacturer
PharmacyPharmacy Benefits Manager
Consumer
Drug Wholesaler
Health Insurer /
Medical Staff
42
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Generic Drug Consumers - India
Demographic
Lower incomeRecent ascension into the middle classTier 2 Consumers
Behavioral• N
eed for OTC products• Basic solutions to prevent symptoms
Psychographic
Lack of access to healthcare services; lack of ability to spend on healthcareIncreased focus: Neuropsychiatry, Oncology, Cardiovascular, Gastro-Intestinal,
.
43
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Patented Drug Consumers - IndiaDemographic• H
igher Income• Middle/High class consumers• Tier 1 Consumers
Geographic• U
rban Areas• Mumbai/Bangalore/Chennai/Delhi
Behavioral• Safety• B
rand Names • Quality Assurance• Prescription based medicines P
sychographic• A
ccess to hospitals/clinics/healthcare
• Western lifestyle diseases
• Increased focus: Neuropsychiatry, Oncology, Cardiovascular, Gastro-Intestinal,
.
44
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
India: Key Health Issues
Heart diseases: number one killer in both urban and rural areas Prevalence rates of CVD in rural populations lower than urban
populations 25% in age group of 25-69 years Predominantly 60–69 years
Cardiovascular Disease
Hypertention
Causes: Urban lifestyle inadequate sleep, cigarette
smoking, stress levels, lack of exercise
Hypertension is 25-30% in urban and 10-15% in rural subjects
Diabetes
Life-long incurable disease caused by high blood-sugar levels
41M Indians have it Expected 74M will have it in
2025
45
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Competitive Analysis
Main Competitor: Cipla Prominent Indian pharmaceutical compnay; manufacturing low-
cost anti-AIDS drugs for HIV-positive in developing countries product range comprising cardiovascular drugs
Other Competitors: Dr. Reddy’s laboratories, Sun Pharmaceutical
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Growth of Indian Population
1.2 billion people
1.6% annual growth
Will surpass Chinese population in 2025
46
Emergence of the Middle Class
530 million people will enter the middle class
by 20251985 1995 2005 2015 20250
200
400
600
800
1000
1200
1400
1600
Demographic Shifts in India
Upper Class
Upper-Middle Class
Middle Class
Lower-Middle Class
Below Poverty Line
47
Implementation
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Q4 2011 2013 20162012
Detailed ImplementationShort Term (present-2012)
Quality Control- Core Value- Quality Control Seminar- External auditing group
- Identification - Practices
Innovative Products in India- Acquisition of Daiichi products- Establish distribution logistics
Medium Term (2012-2014)Quality Control- Continuation of external auditing and bi-annual visits
Innovative Products in India- Training of Medical Sales Representatives- Begin marketing products - Daiichi Medical Conference- Revaluate distribution strategies- Extend product offerings
2014 2015
Long Term (2014 onwards)NDDS- Develop Technology- ResearchQuality Control- Continuation of external auditing and
bi-annual visits
Innovative Products in India- Revaluate distribution strategies- Extend product offerings
49
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Short Term Implementation (2011-2012)
Quality Control Optimization- Addition to core values
- Approaching Dale Atkinson about approaching Executive Committee of Ranbaxy- External Auditing
- Searching for/hiring of external “quality auditors”- Establishing of jurisdiction; responsibilities- Investigate processes of Ranbaxy plants, make sure they adhere to CQ rules
and regulations- Quality Control Seminar
- Planning for Seminar; Location, dates- QC Seminar Follow up
- 2 visits per year by Dale Atkinson and his Quality Committee to Ranbaxy plants
Patented Drugs into India- Acquiring Products from Daiichi- Re-training of Sales Force
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Implementation – Immediate Actions
Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Core Value
Quality Control Seminar
Quality Control Exec. Team: Bi-annual visits
External Auditing Group-Identification
- Begin audit
Acquisition of Daiichi products
Establish distribution logistics
51
Quality Assurance Committee
How to Implement – Weekend Training Session: 2 top level managers from each production
facility Away for one weekend; sessions held by
Mr. Adkisson and his group why is this important? What impact does this have on the company (financially and socially)
Mr. Adkisson and his committee visit plants; (bi-annually for each plant) check on
52
Recommendation Details
53
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
NDDS: Why?
NDDS- Helps companies build patent fences- If they develop a new delivery system for an existing drug, and if
they are First-to-File to produce as the original patent runs out, they can receive marketing exclusivity for up to 180 days
Benefits for Ranbaxy- Transfer Pricing- Following a market trend
- Increased number of Indian Generic Pharmaceutical companies going in this direction
- Mitigates Risk- Reduces focus on US market; allows Ranbaxy to further penetrate
Indian pharmaceutical generic market- Sustainability
- Increased variety of products/services offered- Further penetration of both developed/developing markets- More to offer both new/existing consumers
54
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Why Benicar, WelChol, Effient
1. Quality Control Committee
2. Bringing Innovative Drugs to India 3. Streamline focus of R&D
What brands should we focus on?
Drug Addresses Patent Expiry
Successful In Other Markets
Benicar High Blood Pressure
2016
WelChol Lowers Cholesterol
2014
Effient Heart Disease
2012
Addresses the trend of increasing occurrence of lifestyle disease among Indians
55
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Value Proposition - Daiichi
Sustainable innovative drug manufacturer
Sustainable; financially and in terms of business model + effectively leveraging demographic trends – part of a mutually beneficial partnershipHIGH END/NICHE PENETRATION
Established Distribution Network, In depth consumer knowledge, Market/Consumer Access
What I Get
How I Feel
Who I Am
56
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Value Proposition - Ranbaxy
Sustainable generic drug manufacturer
Further penetration of the Indian drug market, taking advantage of demographic and industry trends – part of an effective partnership
Financial incentives + Increased sales and market share in the Indian drug market; Leveraging of R&D synergies
What I Get
How I Feel
Who I Am
57
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Synergy Office
Will complement our penetration into the Indian market with innovative office
Facilitate the logistics behind our recommendation Sales and Marketing: Medical sales representatives Supply Chain: Use of our distribution channels for Daiichi office Quality Control: Coordinating quality control in for Ranbaxy
58
Externalities
59
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Corruption
Net
work
Established, trusted network
Co
mmission-based
Medical representatives
APIAssociation of Physicians of India (API)
60
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
What is Sustainability?
Pharmaceutical Industry:- Sustainability in terms of business model
- Is the “Hybrid Business Model” sustainable in the long term?- Ensure growth, profitability, and constant innovation
Market Mix
Type of Products
Generic
Emerging Developing
Innovative
A truly sustainable Pharmaceutical company is present in all four segments
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Ranbaxy Generic Drug Market Penetration
Ranbaxy already sells generic drugs in all major developing and developed pharmaceutical markets
Entered Japan through the Daiichi Sankyo Espha subsidiary in early 2010
61
62
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Incentive for API
Provide international industry experience Support API’s objective in organizing, promoting
the search in problems relating to the science of medicine Meetings, exhibitions, conferences
Situation Analysis Recommendation Implementation Wrap-upAlternatives Financial Impact
Hedging
Ranbaxy currently hedges against all major currencies in the markets they operate
Ranbaxy will purchase drugs from Daiichi Sankyo in Japanese Yen
Ranbaxy should continue to hedge against currency fluctuations in the Indian Rupee and Japanese Yen using future contracts
63
64
Triple Bottom Line
Sustainability in a broader context: Additional focus for pharmaceutical companies in regards to
sustainability “Health & Safety” of customers and individuals
Triple Bottom Line: PROFIT
Economic impact Is our recommendation profitable for the company?
PEOPLE All the stakeholders, including society at large Focus on “honesty & integrity” – improves overall quality for stakeholders Positive impact on community by introducing medicine that was previously
unavailable PLANET
Impact on the planet and natural systems