Mankind Pharma has become one of India's pharmaceutical industry's success stories - it has come up from nowhere in the last few years to become a market leader. There are lots of lessons to be learned from their meteoric rise.
Mankind has stuck to its knitting and played to its strengths. Instead of competing with the big boys for selling high value brands to specialists, they have focused on the three important players in the pharma supply chain which other industry players have ignored so far. These three are : the medical representative; the chemist/ distributor/ stockist ; and the general practitioner.
If you look at Mankind Pharma's portfolio, you can see that they are not renowned for their R&D or for creating cutting edge new molecules . They don't experiment with the latest drugs, and focus on selling the old safe, tried and tested best-sellers. They're quite happy for other companies to take the first mover advantage, so they can learn from their experiences, and then sell their me-too products at a fraction of the cost .Yes, lots of companies make similar products, and the profit margins are thin, but they make up for this by maximise their volume.
Because these are basic bread and butter medicines which all medical students are familiar with, because they have been part of the pharmacopiea for many years, they know that the demand for them will be evergreen. Cleverly, they concentrate of marketing to general practitioners ( GPs ) practising in smaller towns. Now family doctors have always been the low men on the totem pole as far as the pharma industry goes. No one bothers to talk to them, because most pharma reps are paid to pamper the high-end specialists - the ones who prescribe all the expensive new molecules which pharma is so happy to sell, because they are so much more profitable. Because Mankind showers so much love and attention on these neglected GPs, they are fiercely loyal to the Mankind brand.
They also take very good care of stockists , distributors and chemists, by ensuring that each chemist shop in the small towns where they operate is well-supplied with all their brands. Because other companies often neglect these small towns, the chemist will often not be able to supply a brand from a reputed company, and will be forced to substitute a Mankind product for this. GPs are happy to prescribe these brands, because they are confident that they will be stocked by the local chemist, and their patient will not need to run around. This also fits is very well with the new Govt of India policy on insisting that doctors prescribe medicines by their generic name rather than the brand, because generics are much more cost effective.
Finally, the most important reason for their success is their focus on their medical representatives. Now the quality of the Mankind pharma MR is not great, and they don't really care about his scientific acumen or presentation skills. They employ an army of low-cost MRs , whose basic job is to go out and make sure that the GPs will prescribe their product by keeping them happy. Let's not forget that Mankind was created by an ex-medical representative - someone who understands the key role which MRs have played in the Indian pharmaceutical industry so far by pandering to the doctor's whims and fancies. He has capitalised on the relationship his MRs are able to establish with GPs, and this has been a wide open space so far , because other companies haven't bothered to compete with him because they think the margins are too thin.
Because Mankind pampers their MRs, they're extremely faithful to Mankind. These are not the MRs which other pharmaceutical industries are interested in poaching, as a result of which they establish a life-long career with Mankind , and have a lot of loyalty to the company. Mankind has had a great run so far, which is why it's being valued so highly by PE players. However, I don't think this is sustainable , because they can't continue wining and dining GPs to win their loyalty, because of the new UCPMP (Uniform Code for Pharmaceutical Marketing Practices ) rules, which will hopefully become a law shortly.
Mankind is going to be forced to clean up its act, which is why Mankind is now reinventing itself by using Amitabh Bachchan as its brand ambassador. It is going all-out to attract patients who live in small towns and convince them that they are a reliable brand. Their message is - You can trust us, not just because your GP prescribed us, but also because Amitabh Bachchan can vouch for the fact that we produce high-quality medicines ! This is an interesting story, which will continue evolving as they adapt with the times.
I am a consultant IVF specialist, who runs one of India’s leading IVF clinics at www.drmalpani.com, along with my wife, Dr Anjali Malpani. We have founded HELP, the Health Education Library for People (www.healthlibrary.com), which is India’s first Patient Education Resource Center. I have authored many books, including: How to Get the Best Medical Care; Successful Medical Practise; Using Information Therapy to Put Patients First; and Patient Safety - Protect yourself from Medical Errors which are available free at www.thebestmedicalcare.com . My passion is patient empowerment; and I believe that using Information Technology to deliver Information Therapy to patients can heal a sick healthcare system. I am an active angel investor ( www.malpaniventures.com)