Health and Medicines

Businessworld
Gauri Kamath

Germany’s merck serono kicked off what could be a troubling trend for Indian pharmaceutical companies when it stopped development on melogliptin, an experimental anti-diabetes drug it had licensed from Mumbai-based Glenmark Pharmaceuticals. Originally, the deal between the two companies had been celebrated by Glenmark as it would have seen Merck pick up the costs of conducting the expensive human trials for the drug. But Merck has decided to drop further work on melogliptin after it acquired Swiss biotech company Sereno and decided to focus on speciality areas, such as oncology and fertility.

The decision reflects how dynamics in the global pharmaceutical industry are changing as companies struggle to fill weak product pipelines and sidestep competition from generic drugs by focusing on specialised cures. This could hurt Indian companies keen on licensing potential drugs to foreign companies as most local firms have focused on traditional areas, such as diabetes, pain and cardiology.


Still, not everyone believes all Indian firms should now mirror the push towards specialty drugs. “There is still large opportunity in primary care,” says Glenn Saldanha, MD of Glenmark. He cites the vacuum created by withdrawn painkiller Vioxx and the safety concerns surrounding that class of drugs as an example of this opportunity. Glenmark has licensed a painkiller to US-based Eli Lilly and says he will also offer melogliptin to other foreign firms.

Yet the question of whether Indian firms need to move beyond ‘me-too’ innovation to survive in a more demanding world remains. Melogliptin is a third in a new class of diabetes drugs of which the first is on market, and the second on its way there. The market is therefore competitive. Indian firms have done almost only this kind of research since the risk is lower. But it also means that unless it offers a superior value proposition a molecule has few takers and may be vulnerable to pipeline reviews.

Meanwhile the Pharma employees tasked for research are among the lowest paid in all major sectors of the job market:

Businessworld
M Rajendran

Pharma majors may well have found a new love for research and development, and not a day too soon, but it’s a floundering romance as the industry remains the lowest paymaster across all sectors. That’s not good news for science and pharma graduates, who remain the industry’s captive employee base at a time when their peers in several other arenas are enjoying the fruits of high attrition.

Salaries across all four levels in the chemical and pharma industry hover below average Indian white-collar pay scales. The survey found that the highest salary drawn by employees who have worked for more than 13 years in this sector ranges between Rs 10.25 lakh to Rs 10.37 lakh per annum. That said, the human resource (HR) budget allocation in the chemical and pharma sector will grow by 12 per cent in 2008. It is small consolation.

This combination of poor pay scales and low attrition has led chemical and pharma companies to shift their focus from ‘employee welfare’ to ‘employee engagement’. ‘Feel good’ expenses, which did not necessarily take the organisation forward, are being repositioned in more effective ways. For instance, intra-organisation transfers may not be encouraged, but club memberships and allowances will compensate.


Lower-level attrition, when it happens, is usually the result of young employees’ need to enhance employability with a post-grad or doctoral degree. Women scientists, who make up 25 per cent of the work force, relocate after marriage. This too leads to attrition, Dasgupta notes.

With more thrust on research and development, the chances are that the sector will make the packages attractive.