UK Report: Keep Calm and Carry On ... Differently - Pharmaceutical Executive


UK Report: Keep Calm and Carry On ... Differently

Pharmaceutical Executive


Nick Burgin, European Director of Market Access, Eisai Europe
There are indeed other segments of the UK pharmaceutical industry that are thriving and promise to bring back the scientific and manufacturing prestige that the country is used to. Generic manufacturers in particular are extremely pleased with the announced budget cuts for the NHS, as this means that doctors will be encouraged to prescribe generic products whenever possible. Watson Pharmaceuticals' vice president for European generics, Anish Mehta, is confident that "one of the greatest levers that exists for cutting costs is to increase the use of generics throughout the system. Generics already save the NHS between 7 billion to 8 billion ($11 million to $12.5 billion) annually and there is still more room for greater cost savings. This is a trend that we are seeing all over the world, from the US to France and Germany. The end goal of governments is to improve the quality of healthcare by focusing more on patient outcomes and streamlining healthcare systems so that they become more efficient." In the face of such savings, the DH went as far as proposing an automatic generic substitution scheme in January 2010, which would require pharmacists to dispense generic drugs whenever available, even when a branded prescription had been written by the doctor. To the disappointment of generics companies, the proposal was later scrapped, but business still seems to be moving full-steam.

Watson is a prime example of the rise of generic players in the country, having acquired UK-based Arrow Generics in 2009 to establish its headquarters for all markets outside of the US. Prior to the acquisition, Watson was a single-market company, whereas today it boasts a presence in 17 markets in Europe and is planning for a greater global expansion in the near future. Mehta explains, "The UK is a trendsetting market that has evolved through different healthcare models to achieve a high level of efficiency and high penetration of generics." While some would argue that the British generics market is already saturated, Mehta believes that "the real penetration rate of generics will depend on what data you look at. Nevertheless, there are still some opportunities in drugs that are still prescribed for their brand even though a generic option is available. Undoubtedly the main growth driver in the future will come from biologic products. Watson is positioning itself to play a very important role in biosimilars in the mid to long term." His vision also extends beyond European borders, as he expects the company to grow steadily over the next few years. "From 2004 until today, we have grown almost $3 billion in revenue and are targeted to reach $4.5 billion at the end of this year. Even as we are expanding our European presence at the moment, we are still looking to grow in other global markets. We are very interested in Latin America and also exploring opportunities in Asia Pacific."


Anish Mehta, Vice President of European Generics, Watson Pharmaceuticals
However, it is not only the generics players that have taken advantage of changing times in the UK. As Big Pharma streamlines their operations, shedding away staff, operational sites, and niche segments, the local industry has eagerly been picking up the pieces to turn them into their own growth opportunities. With origins dating back to 1787, Martindale Pharma is a niche and specialty pharmaceutical company that was struggling to maintain its revenues just over a year ago, when in October 2010 its new chief executive officer, Richard de Souza, took the reins of the company. "My job was to figure out what the company could do better and identify through the product portfolio the therapy or business segments that we truly wanted to be a part of. These segments were selected based on whether we were already ranked No. 1 or No. 2, or if we could achieve one of those positions within a segment over the course of two years," he says. Under this new strategy Martindale has identified five business segments—specials, critical care, ophthalmics, hospital specialty products, and addiction—where it is already leading or is soon to be.


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