MNCs look towards India for a booster dose

In recent months, several pharma multinational corporations (MNCs) are increasingly turning to Indian companies to expand market reach in the country’s pharmaceuticals sector.

Sanofi's partnerships with Dr Reddy's, Cipla, and Emcure, AstraZeneca and Mankind Pharma — teaming up for asthma medication distribution — are a few instances of this trend.

This strategy allows MNCs to leverage established Indian networks and reach a wider audience. Indian companies also benefit from global brands and expertise, say analysts.

Sanofi recently signed a partnership with Dr Reddy's (DRL) to exclusively distribute and promote Sanofi’s vaccine brands across private markets in India.

Through this, DRL’s gains access to Sanofi's vaccine portfolio, including brands like Hexaxim and Pentaxim.

This will boost Dr Reddy's reach and offerings, while Sanofi will leverage the former’s established distribution network and market expertise to expand footprint.

Speaking on this, Kunal Shah from Citigroup Global Markets India stated, “From a domestic company's perspective facing a slowdown in core therapies like acute medication, partnering MNCs offers access to premium brands and specialist networks.

"This enhances their value proposition.”

Similarly, MNCs, with limited presence beyond urban centres, gain wider market access through domestic partners' distribution networks.

These collaborations, often involving fixed-margin agreements, ensure insulated margins for MNCs while increasing volumes through domestic sales forces.

Sanofi aims to reach €10 billion in annual sales from vaccines by 2030.

In the first half of 2023, Sanofi's vaccine sales grew by 8.7 per cent compared to the same period in 2022, reaching €2,390 million.

This growth was driven by several factors, including sales of Covid vaccine in Europe and a recovery in travel and booster vaccines.

Geographically, the strongest growth came from “other countries” which saw a 5.4 per cent rise.

It was driven by strong performance of Pentaxim in China.

This trend extends beyond vaccines.

Sanofi has also partnered Cipla to distribute its Central Nervous System (CNS) medications across India. It has widened Cipla's portfolio and given Sanofi an edge in the crucial CNS market.

Cipla will leverage its extensive network to distribute Sanofi's CNS portfolio, including Frisium, a leading anti-epileptic drug.

Sanofi will retain ownership, import, and manufacture of the CNS products.

Similarly, Sanofi has also partnered Emcure Pharmaceuticals to exclusively distribute and promote its cardiovascular brands Cardace, Clexane, Targocid, Lasix, and Lasilactone in India.

Speaking on whether such deals will continue, Shah added, “This trend is expected to continue, potentially with non-exclusive deals allowing partnerships with multiple players.

"This trend is likely to expand in both value and the number of companies involved, potentially opening the doors for smaller companies.”

MNC’s like AstraZeneca have also collaborated with Mankind Pharma to distribute asthma medication in India.

This further highlights this trend's reach across therapeutic areas.

Mankind Pharma generates 97 per cent of its operating revenue from the India and boasts of a network of over 16,000 field personnel and 13,000 stockists.

As industry analysts like Nirali Shah of the Ashika Group observe, India's pharmaceutical sector is experiencing a "gold rush" of sorts.

And, MNCs recognise the untapped potential beyond the metros.

She stated, “These alliances are a win-win: MNCs gain access to India's last-mile distribution networks and market understanding.

"Domestic players benefit from their partners' global network.

"It's a strategic chess move, ensuring both sides get a piece of the ever-growing Indian pharma pie.”

Earlier this year, Glenmark Specialty, a subsidiary of Glenmark Pharmaceuticals, announced a partnership with Jiangsu Alphamab Biopharmaceuticals and 3D Medicines (Beijing).

It is to bring cancer drug Envafolimab to India, Asia-Pacific, West Asia, Africa, Russia, CIS and Latin America.

Speaking on this trend, Kinjal Shah, pharma analyst of ICRA, stated that, “The trend of multinational pharmaceutical companies partnering Indian counterparts to expand market reach is not entirely new.

"The pace at which these collaborations are happening now is remarkable.

"This is due to a confluence of factors, including pricing pressures in developed markets, currency fluctuations in emerging markets, and increasing government control over drug pricing in India.

"In the past, companies relied on in-licensing and out-licensing agreements to address these challenges.

"Now, we’re seeing more comprehensive partnerships where companies leverage each other's strengths in areas like marketing reach and development capabilities.

"This trend is expected to continue as companies seek new avenues for growth.”