We strongly believe in providing a service plus approach to not only our doctors but also to the patients and the caregivers, Ambati Venu, MD, Abbott India

Limited, tells ET Now.

Edited excerpts:

Abbott India has led up over 100 product launches in about five years. What are the therapies or product lines that these product launches are going to focus on?

We would like to deepen our presence in areas like gastroenterology, metabolic, women health, central nervous systems and vaccines.

So, 21 new products already and there have been product extensions in the past year as well. How have they performed and will that lead to better growth in coming years?

It is too early to comment on the launches that we have just done in the last financial year. As you know, out of all the launches some would succeed, some might not do as well as what we anticipated. But from the numbers I see that out of the 21 launches we have had in the last year, almost 16 are doing extremely well, meeting our expectations and the planned numbers and I certainly see a potential to grow them further in the coming years.

Earlier when a company launched products, it took time to mature and grow the product. But over the years, companies are building a strong
distribution network of over 3,000 stockists and 1.75 lakh retailers. Are there any new product launches that will take less time to reflect in the growth numbers?

We have a very robust distribution setup in this country. We partner with almost 3,000 stockists through whom we reach out to more than 300,000 pharmacies across the country. These 3000 stockists, not only support us for our established brands, but also for all the new launches last year and which we are planning to launch in the next five years.

Can you talk about Thyronorm, which is a drug for thyroid in India? The current market size is still very small. Do you expect it to grow massively in the coming years?

When it comes to the thyroid space and specially hypothyroidism, that is an area which is underserved in this country and that is primarily because of two reasons. The first being the awareness levels and the second being the barrier in terms of cost of diagnosis. The statistics show that if 100 people are suspected to have hypothyroidism, maybe 25 to 30% are being detected, diagnosed and treated. The rest 60% to 70% are still not aware of it and therefore there is a huge purpose for companies like us to really bring about the awareness through various channels — mass media channels or the digital channels.

We also work quite aggressively with various diagnostic centres to see how we can help in bringing down the cost of diagnosis and so that we can serve the patients better. For example, last year alone given our investments in building awareness levels and working with diagnostic centres in providing accessible diagnostic costs, we have been able to screen almost 2.1 million patients in just one year and that helped in bringing new patients to doctors, getting them treated and addressing their health outcomes.

Versus other MNC players, Abbot India has been able to gain mare share. What has been the advantage of a connect with consumers using the technology which has helped you to gain market share?

Abbott has grown almost 13% in the last fiscal year and that growth rate has been almost 1.6 times of the industry growth. This growth was possible because there has been a full strategy. We strongly believe in providing a service plus approach to not only our doctors but also to the patients and the caregivers. We look at the entire continuum of care and see how we can serve the patient across the various stages of continuum of care.

We also look at what interventions as an organisation we need to provide in possibly helping in a particular therapy area in terms of awareness, diagnosis and treatment and most importantly compliance. Over the last few years, Abbott has done extensive work across areas like hypothyroidism, the non-alcoholic fatty liver diseases, threatened pregnancies, vitamin D deficiencies and so on.

As the brand proportion increases, within the portfolio new launches will be evident. You will see EBITDA improvement over a period of time. Is our assessment about how this drug could be the wonder drug for Abbott correct?

That is a continuous process which we as an organisation do take care of. The first and foremost is whatever launches we do, whatever new therapy or sub therapy areas we enter, we ensure that we have the right amount of margins to take the entire thing forward. If the margin profiles are not good and if it is going to dilute the overall margin profile of the organisation, sometimes we take some hard choices and possibly not go with that.

The second thing is there is also a culture within the organisation to drive cost competitiveness and across all facets, not only within the cost of goods but also the way we spend in terms of our SGNA and promotion behind our brands. We constantly evaluate the effectiveness of the spends and therefore there is a very strong cost culture within the organisation which helps us to keep improving our profiles over the years.

Amongst all the MNCs and Indian companies you have the best employee productivity as well. Do you think that efficiency will be the key differentiator vis-à-vis other pharma companies?

Yes, that is also a part of our entire cost structure and driving better profitability and productivity. I do not have the exact numbers but I did look at data where we had benchmarked our employee productivity across similar organisations within the industry.

We have one of the highest employee productivity within the industry. And that is something which we consciously monitor and try optimise our resources to drive productivity to the higher levels.

Do you think that the worst of the impact, price control, GST related issues, demonetisation impact, is behind the Indian pharma?

The overall pharma industry has been growing at a compounded annual growth of almost 11% over the last five years with an exception of last year where we had had two big external impacts both from a demonetisation and the GST rollout. Barring that, there was a very healthy growth over the last five years and my personal opinion is going forward, the industry would continue to deliver a strong double digit growth.

That comes from the basic premise that in our country healthcare is still a very underserved topic. The health burden is still very high and this industry will continue to grow because the industry will continue to serve the patients and there is an opportunity. Having said that, the industry certainly would look forward to a far more stable policy environment and a robust regulatory framework which are extremely important for the industry to continue to grow.

Do you expect India to be one of the high growth markets over the next 10 years versus the rest of the world given that you would do a fair amount of relative analysis on growth markets for the pharma industry?

My key message would be it is time that not only Abbott, but as an industry our whole outlook needs to change from just providing a pill to going beyond the pill in terms of services plus the pill. That would be the prime objective of most of the organisations and so is it for Abbott.

Going forward, that will be our key priority and focus as to how do we bundle up the services from a patient centric point of view. From an awareness or a compliance or even from a lifestyle modification point of view, how can we drive better patient outcomes. TO me that is going to be the game changer for the industry going forward.


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