Phase 2 Topic: Suggest a Global growth strategy for the brand

1. Durga Prasad
durga.prasad13@iimranchi.ac.in
Himanshu Lohani
himanshu.lohani13@iimranchi.ac.in
Sahib Singh Oberoi
sahib.oberoi13@iimranchi.ac.in
RPGLS: Going for Growth
Team Stoned Pilots

2. INTRODUCTION
MAJOR INPUTS MAJOR PRODUCTS
Chemical
Labor
R&D
API / Bulk Drug
Pharmaceutical
Formulation
CRAMS
Government &
Private
Institutions
Retailers
Active Pharmaceutical Ingredients (APIs) – These are substances which are responsible for medicinal activity. APIs
(also called as bulk drugs) are the raw material for the final drug that we consume
Branded Markets
Un-Branded
Markets
Contract Research and Manufacturing Services (CRAMS) – Just like IT, major Pharma companies outsource their
manufacturing work to low-cost centers like India to reduce cost while focusing on drug-discovery and marketing
themselves. Further, they also outsource part of their research activities to some of the Indian pharma companies.
Formulations – While APIs are responsible for the medicinal effect of a drug, we cannot directly consume an API
due to different reasons like stability, taste, odour etc. Hence APIs are combined with certain substances called
excipients to form the final drugs or formulations which are suitable for human consumption.

3. PORTFOLIO
ANALYSIS
DPCO
GLOBAL
OPPORTUNITY
OPTIMISING
COSTS
Recommendation
Analysis
EXECUTIVE SUMMARY
EMCITABEN & FRASTIM
are regulated and can
achieve significant cost
reduction if In-House API
capacities are developed
Orphan drugs,
diversification of
portfolio. Seeking drug
approval for multiple
cancer
Benchmarking on
Market Size, Strength of
local players, regulatory
environment, production
cost differential in host
country and India
Follow a phased
approach for exploring
Markets
PHASE I South American
And South Asian
PHASE II UK, Germany
and Australia.
PHASE III USA Market
Large spike in Online
Sales of the product in
RPLS portfolio. Scope
for consumers to use
mail service pharmacies
for long-term
Prescription Drug
Biosimilars offer a safe
and effective alternative
to originator biological
therapies and potentially
significant cost savings to
healthcare payers
Large Transportation
cost incurred by RPGLS
as the warehouse is
located in Gujarat and
Third Party Mf. at
ADLEY plants
Exploit opportunities
where competitor’s
offering has high price
accompanied with higher
side effect profile
Portfolio Analysis
Neolife portfolio doesn’t
cater to
Prostate, Ovarian, Head
and Neck & Renal
Carcinoma Cancer
RPG Neolife should
target biologic drugs
going off patent
between 2017-20
Mail-order operations,
have lower admin
overhead, purchase
medications in bulk
and repackage them in
larger orders (typically
three-month supplies)
NPPA caps price at 25%
above simple average of
all the drug brands having
a market share > 1%
Price ceiling on NLEM
listing 348 bulk drugs,
which are sold as 650
formulations
In July 2014, NPPA,
ordered capping 108
drugs not in NLEM
Several critical Cancer
drugs which are not
under DPCO 2013 even
though WHO lists them
as essential. Need to
watch out for such
products in the portfolio
Shift to major MNC
brands is likely after price
cuts. Build a strong Brand
Equity
Promoting Combination
Therapy
Control the third-party
manufacturing plants,
provide specific rules
for how they can go
about selling the
products

4. DRUG PRICE CONTROL ORDER( DPCO 2013)
• Previous DPCO order regulated drug prices based on the manufacturing costs stated by their manufacturers.
Manufacturers to ensure compliance within a period of 45 days of the date of such notification
• Ceiling prices would be calculated by taking simple average of all the drug brands having a market share of more
than 1%. NPPA caps price at 25% above this average.
• The final MRP of the drug would factor in Maximum of 16% to the retailer.
• This shifted the ceiling price calculation from a cost based to a market based method. This price ceiling was
applicable on NLEM (National list of essential medicines ) listing 348 bulk drugs, which are sold as 650
formulations. This covers only 14-17% of the Pharma Market
Maximum Retail Price = Ceiling price + Local Taxes as applicable
In July 2014, the National Pharmaceutical Pricing Authority (NPPA, came out with an order
capping the price of 108 drugs not included in the National List of Essential Medicines
(NLEM)
➢ The restrictions on NPPA's powers are with prospective effect and will not impact its
decision to cut prices of 108 drugs in July
Ref : http://www.nistads.res.in/indiasnt2008/t4industry/t4ind18.htm,
http://blogs.wsj.com/indiarealtime/2014/07/15/indias-new-drug-price-controls-unintended-consequences/
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE

5. Ref : http://www.nistads.res.in/indiasnt2008/t4industry/t4ind18.htm
MUSTIN EMCITABEN DOCEL CHEMOFIT ERUBIN ZUBIDOX LORTINIB FRASTIM
NLEM
WHO
EML
IMPLICATIONS of DPCO 2013
➢ Market-based pricing (MBP) in some cases sets the ceiling price higher than even the market leader
The catch here is that all the existing manufacturers selling medicines at a price below the ceiling price will
have to maintain their existing MRP and wouldn’t be allowed to increase their prices.
➢ There are several critical Cancer drugs which are not under DPCO 2013 even though WHO lists them as
essential
It will hurt manufacturers who are at the bottom of the
price ladder and making very little profit in case there is
price increase in raw material, conversion costs etc.
The NPPA only intervenes in cases where
drugs have significant sales and where the
annual price increases by 10%.
FOR DRUGS NOT UNDER PRICE CONTROL
High probability of undergoing
Regulation in near future
PITFALLS of DPCO
Fixed Dose Combinations (FDCs), i.e Combinations of two drugs (within 348) will be out of price control
➢ All India Drug Action Network and other NGOs wants all combination drugs, patented drugs, life saving
drugs and molecules in the same therapeutic class under price control.
Not listed till now. Need to
watch out .
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE

6. CANCER MUSTIN EMCITABEN DOCEL CHEMOFIT ERUBIN ZUBIDOX LORTINIB
Lung
Breast
Cervical
Pancreatic
Gastric
Lymphoma
✓
✓
✓
✓
Chemotherapy
Targeted Therapy
FRASTIM
(BIOSIMILAR)–
supportive care
Hematology
✓
NEOLIFE PORTFOLIO ANALYSIS
Doxorubicin Hydrochloride-API for ZUBIDOX & Epirubicin Hydrochloride-API for ERUBIN are currently
manufactured In-House by Fermentation Route at the Ankleshwar Plant in Gujarat, but not used for formulations
❑ EMCITABEN & FRASTIM are regulated and have no parallel In-House API capacities developed.
Breast Cancer is preferably being
regulated by Hormonal Therapy
however Neolife only has a
Chemotherapy portfolio
➢ 3 API under R&D for Breast
Cancer by Hormonal Therapy
Renal Cancer Therapy has high
growth rate potential but no
formulation is present in the
existing Portfolio .
➢ Targeted Therapy Drug
under R&D
RPGLS API PORTFOLIO
Bulk drug players have low
profitability and RoCE relative to
Pharmaceutical formulation
companies
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
Ref: F&S Reports, Team Analysis

7. ▪ Selecting cancer with unmet need :Neolife portfolio doesn’t cater to Prostate, Ovarian, Head and Neck & Renal
Carcinoma Cancer
▪ Within each Therapeutic Class ( Chemo, Hormonal & Biological Agents ) , several different treatment are available.
Physicians prescribing habits vary .Build presence across all categories.
MAXIMISING REVENUES from the PORTFOLIO
Ovarian Cancer
High acceptance for emerging
immunotherapeutic
Head and Neck Cancer
Very few medicines in development. Targeted Therapy is a
market driver with improved side effect profile
ORPHAN DRUGS-DIVERIFICATION OF PORTFOLIO
For patients on Branded Generics it might be unsafe to
switch brands. Some patients may have allergies or
intolerances to excipients. These issues need to be
addressed by explaining the low side effect profile of
these drugs, especially for comparison with critical dose
drugs
CAPTURING COMPETITOR’S CUSTOMERSCOMBINATION THERAPY AS STANDARD THERAPY
SEEKING DRUG APPROVAL FOR
MULTIPLE CANCER
Improve diversified usage of the Drug increase revenue
stream
➢ Combination Therapy will benefit all as new
Branded product will be combined without
replacing the existing agent
➢ Has high potential in Head and Neck Cancer
Segment
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
Ref: F&S Reports, Team Analysis

8. SideEffectPotency(Decreasing)Price(Increasing)
Pfizer-8305
Dr.Reddy-7835
Filgrastrim Gemcitabien Docetaxel Geftinib Epirubicin Bendamustine
RPGL-6.7
Torrent-2.4
Roche-2.9
Dr.Reddy’s-
41.1
Eli Lily-4.5
Biochem-
12.6
Dr.Reddy’s-13.6
RPGL-14.9
Cipla-43.3
Cadila-2.4
Sun Pharma-2.6
RPGL-10.6
Cipla-17.6
Glenmark 4.5
Zydus-16.3
Cadila-14.9
RPGL-17.6
Astrazeneca-67.3
Pharmecia-13.1
Samarth Life17.8
RPGL-34.2
Alkem-49.7
Pfizer-2.4
RPGL-11.3
Emcure-
25.6
Natco-10.6
Reliance -17.8
Cadila-16.3
Dabur-13.6
Dr.Reddy-13.2 Indilina-42.1
Glenmark-46.7
Dr.Reddy-42.1
RPGL-3505
Cipla-3890
Biochem-1296
RPGL-1355
Dr.Reddy’s-1498
Cipla-1395
Eli Lily-1860
Dabur-3895
Dr.Reddy’s-3901
Cadila
Cadila-400
RPGL-350
Samarth
Life-505
RPGL-505
RPGL-7256
Emcure-7700
Glenmark 973
Alkem-527
Roche-5169
Reliance Life-
2304
RPGL-2655
Torrent-2855
Ref: Buy medicine.org
• In the market of Gemcitabine,
Biochem Phrama offers a better
value proposition compared to
RPGLS-low side effects profile and a
lower price.
Similarly Sun Pharma in Docetexal,
Zydus in Geftinib, Samartha &
Pharmecia in Epirubicin, and Natco
in Bendamustine offer higher value
compared to RPGLS
Side-effects of the product and its
price influence its favorability
among its consumers & customers
• Need to work on improving value
proposition in market where side-
effect profile and price offering is
high with a poor value for
customers
• Similarly, exploit opportunities in
those markets where the
competitor’s offering is high priced
and is accompanied by a higher
side-effect profile
Side Effect Potency(ADULT) on a scale of 100 %, Price in INR
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE

9. For price controlled
products, Pharma
companies have increased
prices by 6.3% based on the
Wholesale Price Index (WPI)
in April 2014.
Thus building a STRONG
BRAND EQUITY is essential.
Good volume growth for
products from these brands
will partly offset the effect of
price reduction.
The share of MNC in the domestic
pharma market is expected to go up to
20% due to increase in prices of price-
controlled drugs and volume rise.
➢ Shift to major MNC brands is likely
after price cuts.
BRAND EQUITY CREATION
Reduce risk in drug usage choice
for the physician thus Increased
post prescription satisfaction for
the physician
Reduced marketing cost
(cheaper to retain customers
than finding new ones)
Increased patient commitment
to continue therapy resulting in
Long Term Revenue stream
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
AWARENESS
• TRAINING PROGRAMS FOR ONCOLOGIST : There are only 30
regional care centers (RCCs) in India, wherein only five to six
RCCs employ skilled medical oncologists.*
• Public health awareness campaign People still relate with the
old treatment regimes and hence are very apprehensive about
related side effects
ASSOCIATION and AFFORDABILITY
Tie-Ups with recent Universal Health Coverage (UHC) schemes (2014)
by the Central Government such as
• Free generic medicine scheme in Rajasthan and Tamil Nadu
• Introducing free diagnostic tests for all patients in public hospitals,
Rajasthan
• Policy for free treatment to 25% of poor in private and super
specialty hospitals in Punjab

10. GERMANY
Regulatory Requirement :EUGMP
Generic Market Size : $ 8.8 Billion
Growth Rate : 7.9%
Volume Penetration : 62%
Major Players :Sandoz, Teva,
StadaArzeimittal
ITALY
Generic Market Size : $ 1.09 Billion
Growth Rate : 21.9% Volume Penetration : 28%
• The generic market is poorly developed, with
originator brands dominating the market.
• No free pricing. Time delay of 135 days in
getting approvals
SPAIN
Generic Market Size :
$ 2.2 Billion Growth
Rate : 18.4%
Volume Penetration :
29%
• 150 day delay in
price approval.
• No free pricing.
• Small incentive for
Doctor to prescribe
generic
FRANCE
Regulatory : EUGMP
Generic Market : $ 4.2 Bn
Growth Rate : 16.4%
Volume Penetration :
43%
• No free pricing.
• Time delay in getting
approvals
UK
Regulatory Requirement :MHRA
Generic Market Size : $ 5.4 Billion
Growth Rate : 8.6%
Volume Penetration : 64%
Major Players : Teva, Sandoz, Mylan
Facility Certification
API Facility, Navi
Mumbai
EU GMP, TGA
Australia,WHO GMP
Formulation Facility
Ankleshwar, Gujrat
UK MHRA
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
The estimated time required
for corrective steps and
complete adherence with
the stipulations indicated by
USFDA is about two years.
AUSTRALIA
Market Size:$0.78 Billion
Growth Rate:8.8% Volume Penetration: 30%
• Takes 300 days to get a drug approved.
• Major players are producing generics
locally thus incur a higher cost of
manufacturing. Therefore, RPG has the
cost advantage.
Major Players : Alphapharm, Sigma, Hospira
JAPAN & SOUTH KOREA
• Good market size( 7 billion USD +)
• High growth rate but low volume
penetration
• Market is dominated by local players.
And there is low-no price differential in
manufacturing prices in India and
South Korea therefore enter JAPAN
with Strategic Tie-Ups
Benchmarks :
▪ Market Size.
▪ Level of generic
Penetration.
▪ Strength of local players.
▪ Regulatory environment.
▪ Production cost differential
in host country and India Ref: F&S, McKinsey & ICRA

11. Phase I : Exploring new markets of South American And South Asian Markets
to improve the top-line and bottom-line of the company. MODE : Product Launch
There is high demand for generics in these markets with a very high CAGR for
Generic Markets. Also our current facility for Neolife has a WHO-GMP which makes
us eligible for selling our products in these markets
Phase II :Entering bigger and more regulated generic markets. Of UK, Germany and
Australia.
UK – Mode : Majority drug procurement is done by tendering. RPGLS can tie-up
with companies and provide them with a cost differential. Major Players : Teva,
Sandoz, Mylan
Germany – Mode: It’s a branded generic market. The company cannot afford to
undertake marketing activities in the country, due to the size of its balance-sheet.
Major Players : Sandoz, Teva, StadaArzeimittal
Australia – Mode:The three biggest players in the market make the products locally.
Therefore, they are facing stiff competition In terms of pricing.
Major Players : Alphapharm, Sigma, Hospira
Phase III : USA Market
As per the annual report of the company it will take another 2 years for the
company to get a USFDA approval for its facility. The company needs to target
drugs going off patent in 2017-2020. Also we should try to achieve FTF License for
the same
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
Ref: F&S, McKinsey & ICRA

12. ➢ EXPLORING OPPORTUNITIES IN BIOSIMILARS
DRIVER
• Increase focus on targeted therapy and biological drugs which are much more effective than
standard chemotherapy and have much less side effects.
• Biosimilars offer a safe and effective alternative to originator biological therapies and potentially
significant cost savings to healthcare payers
Opportunity
• Biosimilars are promoted by European Regulatory bodies.US FDA has also approved biosimilars
in 2010. However, NO biosimilar has been approved yet in USA.
• Reliance Life Science is building an integrated Biosimilars business
RESTRAINTS
• The development, manufacture and licensing requirements for biosimilars are considerably
more rigorous than those for traditional generic drugs ( 8 years- & 75-250 Million USD)
• The cost savings are therefore unlikely to be as large with savings in the region of 15–30%
rather than 80%
Ref: Amgen Biosimilar Report & Business Standard
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
Drugs to target How to go forward: Benefits:
➢ Biosimilars command a much higher premium than
Generic drugs. They are generally sold at 70-90% price
of innovator drug.
➢ Whereas generic products are sold at as low as 1-10%
of innovator drug.
RPG Neolife
should target
biologic drugs
going off patent
between 2017-
20. Example
Herceptin by
Roche, Which
goes off patent
in 2019
PHASE I Start
developing
molecules for these
biologic drugs.
PHASE II Get into a
strategic partnership
with big pharma
companies to get
these molecules
approved.

13. Encourage consumers to use mail service pharmacies for long-term prescription drug therapy, this however is not for
Chemotherapy drugs given under Physician’s Guidance
MAIL SERVICE PHARMACIES
High efficiency obtained in the mail-order operations, including lower administrative overhead and
more ability to purchase medications in bulk and repackage them in larger orders (typically three-
month supplies).
Induce trials :Share the costs of prescription drugs via copayments (paying a fixed cost per prescription) or
coinsurance (sharing a direct proportion of costs).
Heath Card (similar to GSK’s Orange Card) : Significant discount on outpatient medications to senior
citizens and others who have limited incomes
• Patients from the lower socioeconomic class are not always able to undergo the full course of the
treatment, therefore low compliance
Optimization
Managing
In addition, the time lag of several days inherent in the mail-order environment where the patient is
not waiting for the prescription to be filled allows more effective use of techniques such as generic
substitution, therapeutic substitution, formulary compliance, and prior authorization. These can be
accomplished because the physician can be contacted about revising a prescription during this
additional time.
Drugs Frastim Emcitaben Docel Chemofit Erubin Mustin
Inc. in Online
Sales (2010-
2014)
201 % 245% 180% 286% 541% 164%
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
Ref: Buy medicine.org

14. Large Transportation
cost incurred by RPGLS
as the warehouse is
located in Gujrat.
RPGLS Centralized
Warehouse in Ankleshwar,
Gujrat
➢ 60 days of holding inventory
➢ 70 to 75 Lakhs INR of sales
per month with around 14.5
Lakhs of payout per month
ADLEY GROUP
Third Party Manufacturer of Neo
life drug portfolio
Manufacturing facility in
Haryana, Himachal & Punjab

 There are 27 Regional Cancer
Center spread across India
ADLEY GROUP can be used for
➢ Shipping the drugs to
wholesalers
➢ Can act as a seller as it works
under the same domain with a
great depth in the market
➢ They will then incur the
inventory cost for RPGLS
Lower commission
rate ,will not be as
high as they could if
you were to sell them
on your own but earns
a nice consistent
contract for your
business.
❑ Control the third-party manufacturing
plants, provide specific rules for how
they can go about selling the products.
❑ This allows each customer to have the
same interaction with your company
even if these individuals are not actually
hired by the company.
❑ Saves Money & Boosts Production
DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
More than 50 private cancer
hospital in India
GROWTH
TIMELINE

15. DRUG PRICING
REGULATIONS
PORTFOLIO
ANALYSIS
COMPETITIVE
BENCHMARKING
BRAND
EQUITY
GLOBAL
OPPORTUNITY
OPTIMIZING
COST
GROWTH
TIMELINE
Phase 2Phase 1 Phase 3
In-house
formulation
development
Cost
Optimization
Acquire patient data and
issue them Health Card
(similar to GSK’s Orange
Card)
Encourage consumers to
use mail service
pharmacies for long-term
prescription drug therapy
ADLEY GROUP can be used for
Shipping the drugs to wholesalers
They will then incur the inventory
cost for RPGLS
The company currently
develops the API of Zubidox
Erubin,. The company should
develop the formulations for
the same in its own facility to
get higher margins.
EMCITABEN & FRASTIM are
regulated in the market.
Therefore the company
should develop the API’s for
these in their facility so as
to increase their margins.
The company should add drugs for
Renal cancer in its portfolio. Also
the company should focus on
developing targeted therapy drugs
for whom it already has
Chemotherapy drugs.
Global
Strategy
Biosimilars
Develop biosimilar
molecules for drugs going off
patent in 2017-20
Get into a partnership with
big-pharma companies to
get those molecules
approved
Launch these molecules in India
and abroad
Get USFDA approval for in-house
facilities and explore the
FTFLicense Generic market for the
drugs going off-patent
Start producing Neolife
Products in in-house
facilities and Target
countries for whom we
have a license i.e. UK,
Germany, Australia
Enter emerging markets in
Latin America and Asia who
accept WHO-GMP License

16. THANK YOU

17. APPENDIX
Ref: Research scenario in India with Future Perspective,2010
Target by Life Style Habits and Environmental
Factors
Target by State wise depiction of most
incidents in cancer
➢ Tap each geographical area as per the Prevalent Oncology Market & create awareness campaigns for oncology
therapy involved and RPLS product accordingly
1,2 and 3 represent the highest,
second highest and third highest
incidences of that particular
cancer
M: Max cancer incidents in
Males
F: Max cancer incidents in
Females
Non-hodgkins Lymphoma
Lung Cancer
Gall balder Cancer
Cervical Cancer
Stomach Cancer
Oesophageal Cancer
Oral Cancer
Tongue Cancer
Breast Cancer
Ovary Cancer
Oropharyngeal Cancer
Prostate Cancer
Nasopharyngeal Cancer
Skin Cancer
Hypopharyngeal Cancer
Neck Cancer
BrainCancer
Laryngeal Cancer
Betel and nut, pan masala,
alcohol,opium & bhang
Smoking and hookah
Smoked meat, tobacco &
Smoking and hookah
Beetle nut chewing
Tuibur
Consumption
of beetle
leaves
Nuclear
Pollution
Improper
lifestyle and
poor dietry
habbits
Bidi & hookah smoking
Pan, masala, dohra and zarda
Gall stones
Air pollution
Tobacco use in different
forms
Bidi, smoking, alcoholism and
chewing pan
Pan masala, gutka and zarda
Data not available