Biocon India Group

Case Study
Quantic MBA – April 2020 Cohort
Main questions

• What are the advantages and disadvantages of starting and operating

• a pharmaceutical firm in India?
• clinical trials company in India?

• How might these advantages and disadvantages influence Biocon’s decision about whether to
aggressively invest in Clinigene?
Case overview

• The case was originally issued by 2008

• Biogen, an Indian pharmaceutical group, is considering whether to focus on the growth

of its newly subsidiary, Clinigene, and if so, how to do it
Summary

• The Indian pharmaceutical industry and market

• Indian particularities concerning clinical trials

• Consequences of market structure for Biocon Group’s growth strategy

Summary

• The Indian pharmaceutical industry and market

• Indian particularities concerning clinical trials

• Consequences of market structure for Biocon Group’s growth strategy

The Indian pharmaceutical industry developed through the 20th
century into a big supplier for the global market
Typical drug development
Benefits of Indian operating companies
and discovery value chain

R&D Qualified scientists and

Main outsourced professionals
areas
Animal studies

Clinical trials It is estimated that by

2000, 25% of global main
Government incentives and
players’ work in these
Approval & areas were outsourced subsides
Launch

Manufacturing

Marketing & Overall lower costs

Distribution
Internally, the pharmaceutical market is heavily regulated,
favouring local players and incentivizing competition
• India Patent Act
Highly regulated market
• Drug Price Control Order

• Increasing population
Fast growing demand
• Growing access

High competition with low • Over 20,000 established companies

differentiation • Low entry barriers

With these regulations in place, Indian players held a great advantage against global
players on the production of generic drugs but no incentive to conduct R&D on new drugs
for the internal market
Summary

• The Indian pharmaceutical industry and market

• Indian particularities concerning clinical trials

• Consequences of market structure for Biocon Group’s growth strategy

Clinical trials in India have been growing at a fast pace but there
are still limitations for the development of higher value stages

Clinical trial industry in India have some further …but also face different challenges
incentives beyond the overall pharma…

Cost intensive, accounting for

Ethical questions
~60% of the development costs

Current regulation restricts clinical

Genetic diverse population trials of phases I-III to Indian
developed drugs

Restrictions of global players on

Few local players
outsourcing
Summary

• The Indian pharmaceutical industry and market

• Indian particularities concerning clinical trials

• Consequences of market structure for Biocon Group’s growth strategy

With Clinigene already existing operations, Biocon’s main concern
must be on how to better seize this opportunity
Biocon is already set to pursue opportunities on …but to do so in a sustainable way for the group,
the clinical trial market… it has some concerns to target

Competitive advantages Focus

“First-mover opportunities” Culture

Roadmap for integration ambition Public relations and ethics