In recent years, South Africa’s pharmaceutical industry has increasingly shifted its focus to become more patient-centric in everything that it does. However, in the current challenging economy, building on this positive change and delivering greater results for consumers is becoming ever more challenging. Companies operating in this sector will therefore need to adapt and embrace new strategies.
No one knows this better than industry veteran, Jacques van Staden, COO of Cipla South Africa (Pty) Limited (“Cipla Medpro”), wholly-owned subsidiary of Cipla Limited, India (“Cipla”). With a career spanning more than 25 years, Van Staden firmly believes that pharmaceutical businesses will need to make significant changes to the way that they view opportunities and focus their efforts if they are to survive in the years to come. We sat down with Van Staden to hear more about the changes, challenges and opportunities that lie ahead for this sector.
What are the trends in the pharmaceutical sector at the moment?
The South African pharmaceutical landscape remains highly competitive from a range and value perspective. This is good news for all South Africans, who have an increasing need for healthcare while remaining cash strapped.
For businesses, organic growth is currently at single digits, and companies are pursuing varied strategies to deliver on stakeholder expectations and acquisitions are an obvious solution when selected correctly. Cipla South Africa’s own strategy is a case in point. We recently concluded the acquisition of a 100% stake in Mirren (Pty) Limited (“Mirren”), which manufactures and distributes a number of well-established brands of over-the-counter (OTC) medicines, including Broncol cough syrup, Coryx, Tensopyn, and Ultimag.
We also believe that local manufacturing should become a priority. Cipla has a long and proud past within the South African market. Our objective is to build on this and increase local manufacturing. Growing our local manufacturing not only allows Cipla to service our patients, partners and consumers in a more efficient manner, it also talks to our agenda of creating more work opportunities in SA.
Where are the best growth opportunities for pharmaceuticals right now?
There has been a major move towards over-the-counter (OTC) medicines in recent years as patients increasingly rely on the advice of pharmacists as well as self-diagnoses aided the increase of digital tools.
As a direct result, OTC medicines are demonstrating strong growth across the board. I anticipate that this momentum will continue for some time to come. Respiratory, Allergy and Acute Pain remain a major burden for South African patients, while from a prophylactic perspective immune supporters and probiotics are stand outs across the front shop.
How does the acquisition of Mirren affect Cipla’s position in the market?
The Mirren acquisition allows Cipla to extend its portfolio breadth, thereby servicing the growing needs of South Africans. The Mirren products are a perfect fit to our portfolio and I am confident that they will continue to thrive as part of the Cipla OTC portfolio.
The Cipla OTC commercial division as proven in recent years that they have a solid understanding of the market, gatekeepers, patients and consumers. This understanding has translated into breakthrough performance, which has created good credibility with stakeholders, resulting in the confidence to acquire Mirren and expand our portfolio footprint.
What are the biggest challenges in the OTC market at the moment and what will the major market players need to do in order to maintain their position in this market over the coming years?
When I review the OTC portion of the market, I only see opportunity. In my opinion sound strategy selection, ruthless execution and good governance remain the fundamentals for success in the OTC space.
However, it is critical to remain focused. As there are so many selection options in the OTC space, it is easy to become side-tracked chasing revenue that is not linked to strategy. This dilutes resources, energy and effort, resulting in subpar performance.
What are some of the most important things that you have learned about the industry over the last 25 years?
Having spent more than half my life as a proud member of the Cipla family I have learnt so much! The privilege of working with inspirational leaders continues to stretch my capabilities and challenge my limits.
The ability to embrace these challenges has truly impacted my career in the most positive manner. I am also extremely proud of the team that I have assembled over the last 25 years, the majority of which are still part of the Cipla family. I would say that honesty, integrity and passion remain core to me as a person. Living these values everyday allows for good relationships, solid partnerships and sound performance.