Thursday, April 1, 2010

Ranbaxy to hire 1,500 on expansion to push sales

Ranbaxy Laboratories will hire nearly 1,500 marketing executives, expanding its sales team by at least 50%, to spur sales and regain its rank as India’s top drugmaker.

The recruitment push is among the biggest by an Indian drugmaker in recent years, and will be led by India chief executive officer Yugal Sikri, two persons familiar with the pharma company’s plans said.

“Ranbaxy is looking at new rural markets and deeper penetration in interior markets,” said one person who is involved in the hiring. The company plans to hire mostly medical representatives, regional managers and area managers by July to boost sales in the rural markets, he said.

Globally, Ranbaxy, owned by Japan’s Daiichi Sankyo, employs over 12,000 people spread across 46 countries, says the company’s website.

Pharma analysts said Ranbaxy’s aggressive hiring push is also a sign that the company is turning its gaze inwards after problems overseas, especially in the US. The company has run into a spate of patent battles over generic drugs there and its Indian manufacturing units have been under the US drug regulator’s scanner.

And in India, Ranbaxy has been trailing Mumbai-based Cipla since mid-2007. Cipla rode to the top of the Rs 40,000-crore Indian drug retail market with a bigger product portfolio.

Ranbaxy’s sales team of nearly 3,000, which appears slender compared with its rivals and focuses mainly on metros and bigger cities, is also said to be a key reason to keep pace with rivals.

In contrast, Cipla has 5,000 and GlaxoSmithKline 4,000 in their sales teams. Even a mid-sized firm like Mankind Pharma has 6,000 people to push sales. Mankind, among the country’s fastest growing companies, has benefited immensely from sales in rural market and small cities.

A drug company’s field force is crucial to sales because prescription drugs cannot be advertised. Products are typically promoted by local medical representatives through doctors, chemists and hospitals who urge them to prescribe or use their brands over rival drugs.

At Rs 10,000 crore, hospitals and healthcare institutions is a market drugmakers cannot ignore. Ranbaxy will up the ante on hospital and institutional sales, said the second person, an industry watcher familiar with the company’s plan.

“Ranbaxy may create a separate division for hospital and institutional sales, ” he said. Ranbaxy declined to comment. Global CEO and MD Atul Sobti said in February the Gurgaon-based drugmaker would soon roll out a project named Viraat for the domestic market.

“Increase in affordability and accessibility of healthcare have made rural India an attractive and key growth segment,” said Vijay Zutshi, associate director (healthcare) at research firm Synovate. The pricing, distribution and marketing strategy in rural areas is very different from metros, he said.

Emerging markets such as India, Russia, China and Brazil will be the main growth drivers for pharma companies, say analysts. These markets are estimated to grow by 15% annually over the next few years compared with stagnant or low single-digit growth in developed markets such as the US and some European countries.

Article courtesy of Economic Times.