“Retail now generates two thirds of our sales and OTC account for 15% of the total. We started very low in retail and the growth is significant,” Ivan told ZF in an interview.
Dan Ivan, a veteran of the local pharmaceutical industry, took the reins of Actavis in November 2011, after having worked 16 years for Sanofi, one of the leading companies in the local drug industry.
After his arrival, Actavis, a company that focused on cancer drugs (because of the drug portfolio of Sindan, the largest cancer drug manufacturer in Eastern Europe), started to develop sales of non-prescription (over-the-counter) drugs and of other therapeutic areas such as products for central nervous system, the cardiovascular system or the respiratory system (which include some antibiotics).
Actavis’ annual sales currently amount to EUR50 million.
“The strategy was not done (at the time he joined the company i.e.). A diagnosis needed to be made and then keep going ahead with whoever lived. The hospital business is a tradition because of Sindan and then Actavis, but it had stayed in the shadow of distribution for a long time because Sindan first conducted massive distribution operations and then created its own portfolio of cancer drugs. Part of the business model was stabilizing this cancer drug unit.”
The company now ranks third on the cancer drug market and first among producers of generic cancer drugs, according to the data cited by the Actavis boss.
As a result of the decision made at the end of 2011, the company started working with specialist distributors in 2012, instead of doing its own distribution and increased retail and OTC sales.
Dan Ivan recalls that this was not the first time he started with OTCs from scratch, because he did the same thing with Sanofi, but in the 2000s.
“It’s more difficult now, there are really many players, all of them pressured by the clawback tax (a tax manufacturers pay for the subsidized drugs sold i.e.), so they’re investing in OTC. There’s also this trend of dietary supplements, spurred by how easy it is to register them. The pressure is heavy, competition fierce but I am confident.”
The company’s best-selling OTC is Adagin. Ivan says it had been selling some OTC even before he joined it but had a very weak position on the segment.
When he started the development of the OTC range, Actavis ranked 125th on this market and now is a top 30 company.
The new business model does not leave out cancer drugs and when asked about the focus of the company in 2015, Dan Ivan says Actavis will pursue a stabilization of sales on the segment as one of its avenues for development in 2015.
Actavis is number three in the world on the generic segment and wants to reach the same position in Romania, something it could do in three to four years, Ivan says. It posted 28% growth in October 2013- September 2014, while the market grew by 2%. However, a number of factors are likely to impact the growth of the company and one of them is the price erosion, Ivan added.
(English version by Loredana Fratila-Cristescu)