Quality vision pays off for Biopharm
Drug firm endured short-term losses and now looks set for long-term gains
The marketing director of Biopharm Chemicals, Sakesuk Kasemsuwan, remembers a time several years ago, when he was a new recruit at the company, and it was often mistaken for a “farming” enterprise.
However, thanks to the far-sighted vision and bold decision of the company’s owners and its management, the Thai-owned pharmaceutical company has recently become, as he calls it, “A handsome guy who can be choosy.”
“Nearly all of the world’s top-five pharmaceutical companies have flirted with us [to become their partners],” he said.
Speaking to The Nation, Sakesuk confirmed some news reports that Biopharm, which has already been an original equipment manufacturer (OEM) for Astellas Pharma – a Japanese pharmaceutical company – and Boots Retail, a major retail chain, was expected to announce a new deal with one of the world’s top-five drug companies this month.
Under the proposed agreement, Biopharm will produce drugs for the multinational giant to serve the domestic market and other Southeast Asian markets at a later stage.
While multinational drug firms have generally been moving towards more diversification and seeking local partners to mitigate their business risks, their choice of Biopharm has not been a coincidence. Sakesuk said it owed a lot to his firm’s bold moves and decisions made over seven years ago to achieve the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Cooperation Scheme (PIC/S), a European standard for drug manufacturing.
Sakesuk said Biopharm decided to move up from Good Manufacturing Practice or GMP standard to PIC/S in late 2004. It took four years of effort and more than Bt400 million investment to obtain the certification in 2009.
The investment is considered huge when compared to the company’s annual sales revenue of Bt1 billion. At present, there is no other local pharmaceutical firm that has met the European standard. Thailand’s Food and Drug Administration last month made it compulsory for all drug producers to go by the PIC/S standard, but has given them a one-year grace period.
Sakesuk said Biopharm’s investments to achieve the PIC/S standard, which obliged the firm to use medical-grade stainless steel pipes for the whole factory among many other requirements, several years ahead of local regulation and its competitors had actually put the firm at a cost disadvantage when competing with other local drug companies. The bold move stemmed from Biopharm’s corporate vision to be a quality leader, he said.
“We suffered in terms of cost competitiveness because other firms were selling cheaper. Our hope was that the quality hospitals would buy from us and we also aimed for the OEM contracts,” said Sakesuk.
Now that Biopharm has attracted a lot of interest from top multinational drug companies, and the Asean Economic Community is becoming effective in the next few years, the firm’s vision has been proved right, he said.
Biopharm is one of the five flagship companies of Bio Group, which booked sales of US$180 million (Bt5.4 billion) in 2010 and employs 2,500 staff. The four other key subsidiaries comprise pharmaceutical product manufacturer Biolab, consumer goods manufacturer Bio Manufacturing, fruit and herb farming firm Bio Garden, property developer Bioland & Development, and consumer goods distributor Bio Consumer. The group’s well-known products are mostly consumer goods brands such as Eversense, Fineline, Tros, BeNIce, and Ctrl.
The pharmaceutical business is lesser known to the general public as 65 per cent of its domestic sales go directly to hospitals. The drug-store channel accounts for 25 per cent of Biopharm’s total domestic sales and modern trade outlets take the rest.
The company has also been exporting its drugs to neighbouring countries such as Malaysia and Singapore where the PIC/S standards have been required since many years ago.
Nevertheless, Sakesuk said Biopharm had earmarked between Bt15 million to Bt20 million annual budget for promoting its brands, and allocated at least 10 per cent of its sale revenues for marketing activities.
To sharpen its marketing efforts, the company is preparing to launch a corporate brand strategy that will put all product brands under a single umbrella. It is also expanding aggressively into the “pharma foods” business as well as preparing to enter some related new businesses.
In fact, Biopharm has only serious begun its marketing and branding efforts since Sakesuk joined the company eight years ago. Prior to joining Biopharm, Sakesuk had always been with multinational companies – the previous one, Pharmacia, was taken over by Pfizer.
Biopharm’s drug brands include Belcid antacid, Kalvin food supplement, and Monem Morupunem antibiotic.
