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Super 30 Companies of the Year 2019

An Interview with Girish Arora, Alniche Life Sciences Pvt Ltd Founder and MD: ‘We Formed Business Verticals to Expand Coverage to New Markets and Therapy Areas in Line With Our Growth Expectation, this Brings Focus to Key Brands and Support Global Licensing Portfolio’

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“We at Alniche Life Sciences are envisioned to bring novel global products across various therapies and establish deep engagement with the medical fraternity.”

Healthcare industry in India comprises of hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The industry is growing at a tremendous pace owing to its strengthening coverage, services and increasing expenditure by public as well private players. India’s healthcare market is expected to see a threefold jump in value to reach $372 bn by 2022. The healthcare industry in India stood as the fourth largest employer.

Key components of the healthcare market in India are hospitals (Government and Private), pharmaceuticals, diagnostics (imaging and pathology), medical equipment and supplies, medical insurance and telemedicine. Growing incidence of lifestyle diseases, rising demand for affordable healthcare delivery systems due to the increasing healthcare costs, technological advancements, the emergence of telemedicine, rapid health insurance penetration and government initiatives like e-health together with tax benefits and incentives are driving healthcare market in India.

  • The hospital industry in India, accounting for 80% of the total healthcare market, is witnessing a huge investor demand from both global as well as domestic investors. The hospital industry is expected to reach $ 132 bn by 2023 from $ 61.8 bn in 2017; growing at a CAGR of 16-17%.
  • The medical tourism industry in India is expected to double its value to become a $ 6 bn industry by 2018 from $ 3 bn in 2017. Medical tourist arrivals in India increased by over 50% to 200,000 in 2016 from 130,000 in 2015.
  • The diagnostics industry in India is currently valued at $ 4 bn. The share of organized sector is almost 25% in this segment (15% in labs and 10% in radiology).
  • The primary care industry is currently valued at $ 13 bn. The share of organized sector is practically negligible in this case.
  • 100% FDI is allowed under the automatic route for greenfield projects. For investments in brownfield projects, up to 100% FDI is permitted under the government route.

In light of the foregoing, we present Alniche Life Sciences Pvt Ltd – a specialty healthcare firm.

Alniche serves patients and the medical fraternity by offering specialized, high-quality, effective and affordable drugs and wellness products from all around the world. A strong portfolio with products licensed from global partners fulfils the unmet needs of patients in the areas of nephrology, critical care, gastroenterology, dermatology, and advanced wound care.

The firm was incorporated in 2007 and is headquartered in New Delhi, India. Alniche’s efforts have been recognised and received following awards

  • Business man of the year – by Business Sphere
  • Healthcare Elite – by Business APAC
  • Fastest growing brands & leadership – by Asia one

Girish Arora, Alniche Life Sciences Pvt. Ltd Founder/Managing Director, spoke exclusively to The Silicon Review. Below is an excerpt.

Q. What makes Alniche stand out from the competition?

Being very strong in niche therapies, Alniche has a focus on Nephrology, Critical care, Gastroenterology, Skinceuticals and Advanced wound care products. It is dedicated to making available innovative pharmaceutical products in the Indian market and support medical fraternity in making patients’ lives healthier. The firm is ready to mark its existence in the complementary market of medical devices and consumables in the selected therapy areas that align well with their pharma range and one such initiative of the firm is an entry in the advanced wound care segment. Alniche provides specialized, high quality, effective, and affordable medicine and wellness products.

Alniche continuously looks for opportunities to partner with global pharma companies and promotes deep engagement with medical experts. Strategic focus and a differentiated approach empower the company to strengthen new speciality divisions by addressing the therapy gaps. In-licensing of novel products in future growth areas is a critical piece of the overall strategy of the company.

The consolidation of strategic focus with a differentiated approach empowers the firm to follow the new speciality divisions where therapy gaps are significant. There are various factors focused by the firm regarding in-licencing addressing future growth areas, acquiring an existing base to build upon including technology, manufacturing, marketing, etc. Cost and time advantages are also considered along with enhanced expertise and global accessibility.

Alniche has partnered with global pharma organizations to bring novel global brands in India from various organizations including J.W. Life Sciences (Korea), Adhezion Biomedical Inc. (USA), FzioMed (USA), Advancis Medical (UK), PT Dermozone Pratama (Indonesia), Biovite (Australia), and Mastix (USA). In addition, the firm is also collaborating with various global companies that focus on therapy differentiation and ground-breaking product concepts.

Recently, Alniche has formed an R&D alliance with Delhi Pharmaceutical Sciences & Research University (DPSRU) – India’s first Pharmacy University. This affiliation of industry and academia promises to augment further development of new products enabling innovations to meet the medical needs of Indian population. Additionally, Alniche has instituted awards to encourage the young researchers for the new research and innovative products and ideas.

Alniche is achieving these milestones because of its strong and proficient senior leadership team. This expert team comprises of cohesive and capable professionals with an exceptional combination of talent, skills, knowledge, and business acumen.

Q. What challenges did you face in your initial years? What can your peers learn from it?

In India, the pharmaceutical sector is known as a stable and predictable sector with steady yet sustainable 10 to 12 percent YoY growth.

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The challenges in the last decade were mostly about:

  • Adopting and practising compliance
  • Strengthening specialty presence
  • Building in-licensing skills and acquiring projects in niche segments
  • Internal capability building
  • Improving operational efficiencies

Many MNCs in India through improvisation in their current strong systems already travelled a significant distance in all these parameters. The noticeable move was major Indian pharma companies – initiating their defined and conscious journey in this direction. In fact, the status of this journey in various companies is yet to complete and every company is at a different milestone.

The question remains whether these changes are in line with forthcoming challenges or it’s just part of compulsive actions to sustain in the current competitive business scenario.

The answer is partly yes. These were mandatory changes but surely this experience will help them to sail smoothly through challenges of the next decade.

Q. What exactly are the anticipated challenges in the next decade?

  1. NLEM (New List of Essential Medicines) impact on profits – NLEM is not new or even a surprise. This decade we have seen many long built ‘cash cow’ brands included in NLEM, impacting the net profits of organisations. We don’t see this ending, it’s expected that every year of the next decade will possibly keep on including a new set of drugs as essential drugs and hence undergo a price capping.

When a ‘cash cow’ brand is unable to pump the revenues for experiments and expansions then the challenge remains in ‘reverse engineering’ and optimising the COGs through manufacturing and supply chain excellence. This diverts the next decade skills to manufacturing and supply chain from current extreme focus on marketing.

  1. Generic medicines – There is a difference between generic drugs concept in India and in the US. India has branded generic model and in India, not all generics are low priced, unlike the US where generics are more of ‘non-promoted’ and more of chemist push dependent, extending significant component of benefit to the retailer. In a true generic model, the drug costs are lower and the end consumer is extended the cost benefit.

In India, next decade will migrate towards the US generic model and this will compel many Indian companies to adopt ‘true generic’ model from their current one.

The trading influenced current generic business model hence is expected to have a better shape with respect to policies, structure and capabilities in the next decade.

  1. Government policies on mass medical insurance – ‘Modicare’ though in its very early stage is making all strategy heads to sit and proactively anticipate its impact on healthcare and drugs market in India.

A group of MNCs have already responded with their interest to manufacture a ‘low-cost alternate brand’ exclusively for this scheme.

Managing profits through branded formulations and balancing the market shares and overall bottom lines through a strategic approach to mass medical insurance policy will be a skill to look for in the next decade.

  1. UCPMP impact on organisation behavior – For all non-pharma readers…UCPMP is a voluntary code of conduct in practice for pharma companies to ensure an ‘ethical and compliant’ ecosystem in the market. Currently, it has a varying degree of execution across different companies. All major Indian pharma companies have taken up this seriously and there is a visible improvement in the ethical and compliant ecosystem in recent times.

However, it is still voluntary. Conversion of UCPMP to law will demand a stronger, complete and accountable structure of Legal and Compliance departments.

Processes, documentations, and audits will supersede marketing aggression. Marketers ought to have compliance knowledge as well as a legal team should be compelled to have sensitivity towards business priorities.

  1. Corporate hospital dominance in urban India – The top of the pyramid will be major corporate dominating the urban segment and bottom of the pyramid will be the mass insurance driven rural segment.

It’s expected that more than 30 percent urban corporate business will depend on the rates that you offer rather than ‘orthodox brand promotion to HCPs’. Corporate hospitals routinely called key accounts and its management will hence be a new, independent, and self-sufficient business lever for pharma companies.

Individuals with key account management capabilities, negotiation skills will observe sustainable growth opportunities in the next decade.

Digital though not mentioned above will be a compulsive adoption along with other forthcoming challenges.

Forthcoming challenges are definitely different from what Indian pharma sector has experienced in past. Every challenge will demand a separate and exclusive skill set which will be largely different from existing marketing and sales driven mindset. Proactive approach, right capability building, not just speed but the quality of the actions and most important, segmentation of business in right buckets will be the key to successfully face the challenges of next decade.

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  1. Expansion into Medical devices, Diagnostics & OTC – Pharma companies have better equity among stakeholders across the entire healthcare industry. This includes Doctors, Paramedical staff, Pharmacists and Purchase head of all hospitals. With change of healthcare practice, preference of patients and the emergence of structured hospital chains, pharma companies are stretching to reinvent their product portfolio and sales models.

A survey shows that in a hospital, a patient spends only 25% of medicines, however 50% on treatments involving medical devices & diagnostics, apart from rest 25% on hospital stay & fee. This is a big opportunity for pharma companies to go to next level and include devices & diagnostics in their portfolio and leverage their years of equity with all stakeholders in healthcare industry.

Additionally, masses in large are moving from curative to preventive attitude. This is opening up “Wellness” market, that allows population to make their own decision to use these OTC healthcare products. With India’s large population, many pharma companies are targeting this market and introducing products for Weight management, Cough & cold, Pain management, Skinceuticals, Nutritionals and Gastro health.

"We travelled from a sales-and-marketing structure to a business unit one to ensure more accountability, manage evolving business needs, and use the equity of organization for reaching out to a different set of prescribers.”