Blog #6 – The Drug Act 1976

The time I started working was sort of transitional period. The much-hyped Generics Policy introduced in 1972 by Late Comrade Sheikh Rasheed of Peoples Party had failed to give expected results. The manufacturers were unhappy because they could not promote their Brands. Brands are important because people remember Brands, even when they do not remember the brand-owner company. New product launches were few and far between. Every company had few products and they were all flagship brands, hence the unhappiness about not being able to promote brands.

In the beginning of 1976, word started spreading that the government is contemplating to roll back Generic Drugs Policy. In April 1976, new Drug Act 1976 was promulgated, Generic Drugs Policy ceased, and Brands returned. Drug Act 1976 still by and large prevails.

Even though the news had been circulating, all manufacturers were not prepared for change. The New Drug Act required all manufacturers to register their manufacturing licenses and products again. In the chaos that ensued, there was shortage of drugs. However, it was short-lived, and market returned to normal quickly.

Abbott Labs won this round hands-down. They probably had better access to inside information. They were the first to get their license registered; their ML No. is 00001. As soon as the New Drug Act came into force, Abbott flooded the market with their flagship brand Surbex-T (Vitamin B-complex & C) stocks. The same day they started a very aggressive promotion campaign for this brand. It made Surbex-T Category Leader in B-complex C preparations and it kept leading by a wide margin for a long time. Abbott followed it up quickly with re-launch of other brands. Apart from whatever else went later into the growth of Abbott, their agility and sharp reaction at that time contributed in a big way. It was truly a marketing scoop which the legendary Director Marketing of Abbott, Late Nasir Mahmood boasted about. Nasir Mahmood left indelible imprint on Pharma Industry. He was not universally liked but he knew what he was doing and was excellent at that. I had the privilege of many interactions with him while I worked in Abbott. We shall talk more about him when I come to that period.

The Brands returned, and the competition was intensified. Probably some of the new launches which had been on hold due to Generic Drug Policy were also fast tracked.

Product launch in that period was a long, sustained activity. Product life cycles were longer and therefore companies invested in the launch, worked hard and waited patiently for building the brand. And they did not hurry with the next brand because they did not want the customer to get distracted. Look at any of the older brands; those are still better known and sell decently.

In retrospect, the Generic Drug Policy was well-intentioned, but ill-executed. It sealed the fate of any such adventure for ever (most likely). It is not unusual. Even in corporate world, some of the most (conceptually) wonderful strategies, fail ever so miserably in execution. The highly respected Michael Porter of Harvard Business School revolutionized the concept of ‘Strategy’ in 1979 while he was Associate Professor. The concept was enlarged and enriched further by him and others. Of late, ‘Execution’ has also been greatly emphasized upon.

Harvard Business Review, March 2015 issue had a research article titled “Why Strategy Execution Unravels – and What to Do About It”². The authors Donald Sull, Rebecca Homkes and Charles Sull open with this paragraph: ‘We know that it matters. A recent survey of more than 400 global CEOs found that executional excellence was the number one challenge facing corporate leaders in Asia, Europe and United States, heading a list of some 80 issues, including innovation, geopolitical instability, and top-line growth. We also know that execution is difficult. Studies have found that two-thirds to three-quarters of large organization struggle to implement their strategies.’ Government is much bigger organization than any corporate, and the inherent frictions, lethargy, bureaucracy and compliance to procedures makes the execution even more challenging’.

The Drug Act 1976 has been a key factor in the overall growth of Pharma in Pakistan, and of the local pharma. We shall track the growth of local pharma in the next blogs. We must recognize that although branded generics have done well in most countries, their growth in Pakistan has been exceptional. The Local Pharma deserves huge credit for this development.

References

1.        ‘Why Strategy Execution Unravels – and what to do about it’ - Donald Sull, Rebecca Homkes, Charles Sull; Harvard Business Review; page 58-66