How this Ludhiana-based businessman is staying relevant in the ever-evolving pharma landscape
In a family of 40 doctors, Ludhiana-based Neeraj Satija, Director of Hallmark Pharmaceuticals, is the only person who did not pursue the medical profession. He says, "My grandfather, father, and relatives are all doctors. But the profession never really interested me."
The fact that Neeraj’s father, Dr Rajan Satija, spent more time on his business than in pursuing medicine may have had something to do with it. “My father is a doctor-turned-businessman. He became a doctor due to family pressure. But later, he carved his way into the business, which is what he always wanted to do," Neeraj says.
In 2005, Neeraj joined his father in running his pharmaceutical manufacturing firm, Haryana Formulations, which his father had set up in 1980 in Faridabad, Haryana.
Within a year, the father-son duo launched another pharmaceutical firm called Hallmark Formulations, in Ludhiana, Punjab.
The company, with its state-of-the-art five lakh sqft plant, manufactures around 400 products, ranging from antibiotics, oncology, and cardiology drugs to injectables, protein powder, and skin-care products.
The approved suppliers to hospitals like Max, Fortis, Vedanta, and many state-run hospitals in Ludhiana, Hallmark and Haryana Formulations are currently clocking a turnover of Rs 75 crore. Neeraj expects the turnover to double by next year as the companies have recently bagged a number of government orders.
The companies distribute their drugs through ethical marketing practices, such as promoting through doctors, or through franchise modeling, by hiring distributors in different regions. The company also does third-party manufacturing for established brands like Cadila, adds Neeraj.
By next year, Hallmark Pharmaceuticals plans to start its own hospitals in Ludhiana in a joint venture with big players from the industry. It is also setting up a disinfectant plant, and a cosmetic plant in collaboration with a Greek company.
What the doctor ordered
Yes, Neeraj comes from a family of doctors and, therefore, by association, has a wide network of people he can reach out to in order to promote the drugs he manufactures. But no one will write a prescription for your medicine if it does not pass muster.
“A doctor would never prescribe a medicine he isn't sure of. He would never recommend a substandard product,” Neeraj says, adding that the first order of business was meeting quality norms. The necessary certifications--GMP, WHO-issued, FDA--assure doctors of the drugs’ quality.
The second benchmark was getting the pricing right. In this regard, Neeraj applauds the present government for putting a cap on the MRP of drugs to prevent pharmas from hiking up the prices keeping profits in mind.
A thriving pharma industry
According to a report by India Brand Equity Foundation, the pharmaceutical industry in India stood at $33 billion in 2017. India exports to more than 200 countries with the US being the key market.
The exports for the year 2017-18 stood at $17.27 billion. The 'Pharma Vision 2020' of the government of India aims to make India a hub for end-to-end drug discovery. The government also plans to set up a $640 million venture capital fund to boost drugs discovery and further develop pharmaceutical infrastructure, according to media reports.
Learnings and challenges
On talking about his learnings from the business, Neeraj says, “It is a brilliant business. However, it is a business with no room for mistakes. If you go wrong, consequences would be fatal.”
He adds that standardisation and state-of-the-art facilities are needed, which is when a company can be certified. “There is a defined system for everything. You need to have the best people and the best infrastructure in line with WHO mandated standards.”
Given that banks have become increasingly cautious with lending in recent times, Neeraj says, “One must be really sure before venturing into this business because investments required, both at the initial and operational stages, are huge.”
He adds that they have been careful in their operations and not expanded in haste. "Our progress has been gradual. Had we borrowed money for the second plant, things would have been fast, but we refrained," adds Neeraj.
Neeraj, therefore believes that in the coming times, medium- and small-scale drug manufacturers in the country will be very limited. “Given the criticality of the sector, laws are becoming increasingly stringent. The manufacturers have to get their license renewed every five years. Renewals are accorded only if the production house stands in compliance with the latest laws, which in turn requires continual investment in accordance with the changing laws.”
