76 | forbes india december 29, 2017By aveek dattat he Patient Healer
Pre Paring CiPla to ComPete in a ComPlex world while
Preserving the Pharma ComPany’s ethos is the Challenge
that samina vaziralli has haPPily aCCePtedN
estled a few
metres away
from a bustling
thoroughfare in
central Mumbai is
the office where
it all began for Cipla, one of India’s
oldest pharmaceutical companies.
Founded by scientist Khwaja
Abdul (KA) Hamied in 1935, the
pharma major is an extension of his
nationalistic spirit through which he
wanted to serve people by making
affordable medicines for the masses.
On a sultry October afternoon,
standing in front of the imposing
building in central Mumbai, Yusuf
Khwaja (YK) Hamied—the company’s
non-executive chairman who, at 81,
is just a year younger than Cipla—
points to the ground where he’s
standing and proudly asserts that
Mahatma Gandhi once stood there.
YK Hamied (ranked 60 on the
2017 Forbes India Rich List with
a net worth of $2.62 billion) is as
illustrious as his father, who was
not only a disciple of Gandhi but
also well-known to the man who led
India’s freedom struggle. The son
took on the might of leading pharma
firms in the quest to sell affordable
life-saving drugs for those suffering
from AIDS in the developing world
at a minimal cost of $1 per day. Other
manufacturers sold the same drugs at
around $12,000 per patient per year.
It is this enduring legacy spanning
eight decades that YK Hamied’s niece
Samina Vaziralli, 41, has inherited.But with the weight of a rich history
comes the burden of challenges too.
Since being appointed executive
vice-chairman in 2016, she has
been charting Cipla’s future course
while ensuring that the company’s
reputation only grows stronger.
Vaziralli, the daughter of YK Hamied’s
brother, Mustafa Khwaja (MK)
Hamied (77), had no prior experience
in pharma before joining Cipla in- However, the postgraduate
in international finance from the
London School of Economics and
Political Science believes her fresh
and pragmatic approach along with
an empowered senior management
will aid her gumption to take bold bets
and rejuvenate the pharma giant.
C
ipla’s primary aim when it
started operations was to cater
to Indians. It has lived up to
that promise and has one of the largest
field forces (of around 10,000 medical
representatives) and marketing setups
in the country. Also, unlike peers such
as Sun Pharma and Lupin that earn a
big portion of their revenues from the
US and other global markets, Cipla still
garners a majority of its topline from
India (around 40 percent compared
with, say, Lupin’s 22 percent).
The pharma major spent a
significant amount of resources for
its global crusade against AIDS and
making affordable medicines for
other life-threatening diseases. In the
process, the $2.2 billion (by revenues)
company had to forego other avenues[n e x t g e n]s a m i n a va z i r a l l i
of growth. Most notably, the lack of a
front-end marketing setup in the US—
the largest and most lucrative market
for generic drugs in the world. Cipla
has a presence across key therapeutic
areas, including respiratory, oncology,
cardiovascular, diabetes, hepatitis
and infectious diseases. And while it
had a presence in over 120 countries,
its existence in major markets was
mostly through partnering other
pharma companies. The partners
would market end-products based on
the intellectual property that Cipla
developed and passed on to them. The
upside to such a model was limited as
pharma companies that market drugs
themselves are the ones that realise
the maximum value from the business.
These factors, compounded by the
challenges in the pharmaceuticals
space, including pricing pressure and
intense competition in the US and
India, have led to modest growth in
Cipla’s earnings (See box Financial
Performance) compared to its peers. It
is a reality that Vaziralli is aware of.t
he biggest challenge before
Cipla today is to catch up.
“We were an India-focussed
company with a front-end setup
only in the country and growing
organically,” says Vaziralli. “We were
a great partner of choice, but we
remained in the back end, using our
R&D and manufacturing capabilities
to unlock commercial value for
others. Today Cipla has built front-
ends in the US, South Africa andRichest
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