Mankind on a mission to rewrite the pharma story

MUMBAI: Life indeed begins at 40, Ramesh Juneja would tell you. At 44, when people tend to think about retirement, he was turning entrepreneur — starting a pharmaceutical company with his younger brother and nephew with Rs 50 lakh capital.

And he hasn’t done badly at that. In the last 11 years, the company, Mankind Pharmaceuticals, has clocked an average growth of 59% year-on-year, reaching a revenue level of Rs 510 crore from Rs 3 crore in the first year of operations. What’s more, it is among the top five pharma companies in the country in terms of domestic sales growth.

The journey started in 1994. An area sales manager with Lupin in Meerut, with two decades of experience in sales and marketing, Juneja knew where the big boys of pharma faltered.

Lupin’s own success story was an inspiration, too. “I thought when Lupin can start with a capital of Rs 5,000, I can do much better with Rs 50 lakh in my kitty,” says Juneja, managing director of Mankind.

Mankind started selling from smaller towns, which the biggies didn’t quite serve.

But, there were some fundamental challenges. The local pharma industry is one of the most competitive in the world, with over 100 brands for the same medicine in some categories. Also, the distribution and retailing is controlled by associations, which are similar to unions — at a single call, a company’s medicines can be boycotted across the country.

“Stockists, retailers and sales force can make or break a company. Mankind knew how to take care of these three important things. Juneja offered fat margins to the retailers, incentivised his sales and marketing team better than any company can,” says a marketing director of a domestic company.

In the very first year of operations, Mankind clocked a profit on sales of Rs 3 crore, selling only in Meerut and places close by. He replicated this success in other small towns before entering the metros.

“He has re-written the golden pharma marketing rules. Mankind has the lowest pricing for those products that doctors prescribe. When another company rep (representative) markets a product, the doctors ask whether the product can be sold at a price similar to Mankind,” says Raja Smarta, managing director, Interlink, a pharmaceutical consultancy.

“His entire success story is based on marketing,” says P A Patil, vice president - outbound supply chain and business development, Lupin.

In metros, the reps cover prominent doctors, the opinion leaders, in each area. Usually, reps are only able to reach one in four doctors. “Juneja filled this gap. With a bigger sales force, he started with these unattended doctors,” says Patil. “Mankind has 65 reps in Mumbai when every other company keeps only 25,” says Smarta

In three years, the company has a target of employing 4,000 reps, which could well make it the biggest pharma sales force in the country.

But, all that aggression couldn’t but impact the profits, could it? “Our profits are still low. Till two years ago, we worked with sales to profit margins of 4%,” says Juneja. That is changing, though. “We attained margins of 7% this financial year and next year’s target is 8%.”  Improvements in other systems and processes have also started. Addressing complaints and problems within 48 hours is the company’s new management policy. Fine-tuning has begun as the company gets closer to its target of going public.

Mankind is targeting sales of Rs 1,000 crore by 2010, the year it plans its initial public offering.

In the next one year, the company wants to get into contract manufacturing and exports. With this vision, it has set up a US Food and Drug Administration approved factory in Himachal Pradesh, even as a research and development facility is under construction at Gurgaon.