Last Updated : Mar 03, 2017 11:11 PM IST | Source: CNBC-TV18

To cut healthcare costs, US must partner India: Biocon's Shaw

Biocon Chief Kiran Mazumdar Shaw says India is not an outsourced services country anymore, it is an innovation and knowledge partner.

Biocon Chief Kiran Mazumdar Shaw believes to cut costs in the healthcare sector, US should partner with India. "India needs to position itself in a much stronger way.”

"India is not an outsourced services country anymore, it is an innovation and knowledge partner," she said.

On Thursday CNBC-TV18 reported Biocon will see two crucial inspections later this month and in early April. Company's manufacturing sites will come up for inspections by the European medicines agency (EMA) later this month and next will be an inspection by the United States Food and Drug Administration (US FDA).

Speaking to CNBC-TV18, Shaw said the company is prepared for the inspection. “These (inspections) are triggered by the fact that our dossiers have been accepted by the US FDA and EMA, we were expecting this.”


According to few analysts, biologics facility are a tougher challenge and many foreign multi-national companies couldn’t get past EMA and US FDA. Shaw says these facilties are more sophisticated and complicated but in most of the inspections it’s the drug product that is of the major concern rather than the facility.

Inspection approvals are a huge opportunity for Biocon and Mylan which is looking at an addressable market of over USD 25 billion.

Below is the verbatim transcript of Kiran Mazumdar Shaw's interview to Latha Venkatesh and Anuj Singhal on CNBC-TV18.

Latha: Tell us about these inspections, mid-March and early April, are they something that you are eminently prepared for?

A: These are triggered by the fact that our dossiers have been accepted by US FDA and EMA as we have reported acceptance of two dossiers by US FDA and several by EMA. So this is something that we were expecting and this is something which is very important for the review process and we have been given dates by US FDA in September and October. So I think it is going according to process.

As a company we are very prepared for inspections, we have a good track record for inspections. In fact, our drug product facility has already been inspected by both US FDA and EMA. Now the drug substance facility, the biologics facility has to now undergo the similar inspection. The fact that we have successfully completed a Japanese inspection for insulin Glargine, basically bodes well for these inspections.

Anuj: Are you on course for your filings in US markets and in European markets as well?

A: We have been sharing with you our dossier submissions and we are on track for our pipeline of biosimilars. So this is a very important event because we are waiting for these dates in September and October. So these inspections are a part of that process.

Anuj: On this drug Neulasta, which is USD 4.7 billion market size in US, what are your expectations, what kind of opportunity is it for Biocon?

A: It is a very large opportunity for Biocon and Mylan and considering the fact that there are not too many companies who have been able to submit dossiers for the same product, we expect it to not be a very crowded market and we have a good opportunity to gain a significant market share once it is approved.

Latha: Are the biologics facility a tougher challenge than the other pharmaceutical plants? There were some analysts who were saying that it is a tougher challenge and lately some foreign drug multinationals abroad couldn't quite yet pass the EMEA and the US drug authority?

A: Certainly, biologics facilities are very sophisticated and complex facilities but like I just mentioned, the fact that we have very successfully completed a very stringent inspection by the Japanese Electromotive drug-administration (EMDA), I think can tell you that we are obviously making all the required preparations to face similar audit and inspection by US FDA and EMA.

The fact is we have had a pretty good track record of successful inspections. In most of these inspections, the drug product is what causes the problems and there we have had very successful inspections by both US FDA and EMA. So we hope that we will have a very positive outcome. We are in a very good state of preparedness.

Latha: The other news that we got in the last 24 hours is that Roche is succeeding in developing a breast cancer product with Perjeta combined with Herceptin, will that be a very big challenge given your partnership with Roche, if this combination drug is more potent than Herceptin alone, does that make the Herceptin product evolution a little less likely?

A: The fact is that you have to co-administer it with a Trastuzumab or Herceptin, so the fact is that any healthcare provider who needs to basically provide this therapy will have to use Trastuzumab. I don't think any health maintenance organization (HMO) would shun using a biosimilar Trastuzumab if it is a discounted product.

So whilst Roche is trying desperately to hang on to its Trastuzumab market, we do have a good opportunity to even play in that market. I think we remain very confident that this is a big opportunity for Mylan and Biocon.

Anuj: One of the stories in last one year in Biocon has been your success of Glargine in Japan in particular where you garnered 25 percent market share. Can you ramp up from here as well?

A: I must tell you that yes, Japan is a very important market from a point of view of establishing credibility in highly regulated markets. However, the market size itself is not enormous. So, even if we ramp up even more than what we have at the moment, it is not the big opportunity that Biocon and Mylan are addressing. The bigger opportunities of course are in the US and European markets. That is where our main market focus has to be in terms of market share.

Of course Japan is an important market and we hope to get a significant part of that market share, which our partners Fujifilm are attempting to do but the total market for insulin Glargine in Japan is less than USD 150 million whereas putting it in perspective, the markets for the same product in US and Europe are USD 7 billion. So that is what you have to put that into perspective.

Latha: Coming back to this plant inspections, is this a huge opportunity? If you got a tick mid-March and early April from those two inspectors, will that mean a seminal change for Biocon, what would it be in money terms a year down the line?

A: Certainly these inspections are extremely important. That is very crucial for us. In terms of an opportunity, if you look at just the product and product dossiers that we have submitted, we are looking at an addressable market of over USD 25 billion. So it is a sizeable opportunity for Biocon and Mylan.

Latha: If God forbid they told you that this and this and this has to be rectified then how much do things get postponed for you?

A: I do not want to even hypothesize on that but in such eventualities, we will do what is necessary to get to the market in time because even if you get the approval in September and October, obviously there is a waiting period in terms of other aspects of the ability to launch in the market but hopefully that will not happen because we are very hopeful and given our track record, we hope that we will have a positive outcome.

Anuj: I wanted some thoughts from you on what Donald Trump had to say in his inaugural address. The emphasis was more on bringing down the health insurance cost but what was your key takeaway and for Indian pharma sector as a whole, should there be any worries?

A: If you look at what Donald Trump is basically voicing, it is his concerns about spiralling healthcare costs. There is a single-minded focus on bringing down healthcare cost. India is a very important strategic partner for the US in bringing down these costs. India needs to basically position itself in a much stronger way even in the IT services sector or any services sector for that matter, we are not an outsource services country anymore. We are an innovation partner, we are a knowledge partner, there is a symbiotic partnership with the US and that is what needs to be projected. The same needs to be projected for the pharma sector where we are very relevant and strategically important for the healthcare system in the US to be sustained at affordable or at viable level. So this is what is important for us to project and I believe that we have a very important opportunity to play this role in the US.

Latha: Has peace been finally established between the old Infosys founders -- now just shareholders -- and the management and the current board?

A: I do not want to answer questions the way you put it. I want to say that a lot of unnecessary kind of issues have been blown out of proportion. I personally believe that Infosys is an iconic institution, which needs to focus on business rather than get distracted with a lot of unnecessary and unsubstantiated allegations. So, as a board member, I am trying to focus on getting management to drive business first rather than get distracted by all these other issues.

Yes, we are hopefully resolving a lot of perceived differences, let us put it that way.

First Published on Mar 3, 2017 11:26 am