Detailed Narrative
Regulatory and Pricing Headwinds
FY17 was characterized by severe regulatory pressure, with the company losing approximately ₹80 crores due to NLEM list updates and negative WPI adjustments. Management expressed frustration with the NPPA's recomputation of prices under Para-18, which was unexpected. These pricing actions, combined with the FDC ban, created a total annualized P&L impact of ₹450 crores to ₹500 crores.
The Corex Franchise Pivot
Following the ban on Fixed Dose Combinations (FDC), Pfizer voluntarily withdrew the original Corex Cough Formulation despite a favorable High Court ruling, citing ethical concerns over adverse usage. To mitigate the loss, the company is pivoting to a 'Corex Franchise' model, including Corex DX (non-codeine) and the newly launched Corex T. Management plans to launch 4-5 additional line extensions to regain the ₹185 crore revenue lost from the original product.
Strategic Portfolio Expansion via Meronem
A key pillar of the recovery strategy is the distribution agreement with AstraZeneca for Meronem, an anti-infective with an estimated annual revenue of ₹100 crores in India. Billing commenced in May 2017. This addition, alongside other planned launches, is intended to help the company achieve 'market-beating' growth and return to a flat revenue base on a like-to-like basis by the end of FY18.
Prevenar 13 and the GAVI Impact
Prevenar 13 has become Pfizer India's number one brand, maintaining a 60% market share in the private sector. While the government has introduced the vaccine into the National Immunization Program (NIP) via a GAVI donation from Pfizer Inc., management insists this will not cannibalize private sales. They argue the public and private markets serve distinct socioeconomic segments, and the NIP inclusion actually validates the product's clinical superiority.
Operational Restructuring and Efficiency
Internally, Pfizer has restructured its business into separate commercial selling and marketing teams to improve customer centricity. The field force of approximately 2,000-2,300 people has been reorganized into Critical Care, Primary Care, and Chronic Care teams. This restructuring is aimed at creating efficiencies to offset the impact of annual increments and declining sales revenue on the employee expense ratio.