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Kiran Mazumdar-Shaw

India’s ‘Accidental Entrepreneur

A pioneer of the biotech industry in India, Biocon chief Kiran Mazumdar-Shaw is a recognised global thought leader

Indian billionaire entrepreneur Kiran Mazumdar- Shaw is a pioneer of the biotech industry in India. She founded Biocon Limited, the country’s leading biotechnology enterprise, in 1978 and serves as its Chairperson and Managing Director. Starting at the age of 25 in a field not understood by many, Kiran calls herself an “accidental entrepreneur”. Though she had plans of pursuing a career in brewing, she became the head of India’s leading biotechnology firm. She spearheaded Biocon’s growth from an enzyme-manufacturing company to a bio-pharmaceutical.

In 2004, she established a social responsibility wing at Biocon, the Biocon Foundation. It focuses on health, education, and infrastructure. Known for her philanthropic endeavours, she was awarded the Padma Shri and Padma Bhushan, India’s fourth and third highest civilian honours, in 1989 and 2005. Her outstanding contribution to the fields of science and chemistry, along with her will to succeed, distinguishes her as one of the most successful female entrepreneurs of our times.

Kiran Mazumdar-Shaw cuts a formidable figure in India’s pharmaceutical industry. The chair of the country’s largest biopharmaceutical company, which registered more than 65 billion rupees ($930 million) in revenue in 2019, established Biocon in 1978 with an initial capital of just 10,000 rupees ($140). Mazumdar-Shaw has increased Biocon’s stable of products from a single papaya enzyme, used to arrest the clouding process in beer, to scores of diabetes, oncology, and immunology treatments reaching more than 120 countries. Its mission, says the company, is to make drugs and medicines affordable to all, with an innovation model seeking to “reduce disparities in access to safe, high-quality medicines, as well as address the gaps in scientific research to find solutions to impact a billion lives.” Biocon’s “Mission 10 cents,” for example, offers human insulin to diabetes patients in lower- and middle-income countries for less than ten cents a day.

COVID-19 has touched Biocon’s founder in an especially personal way. In August, Mazumdar- Shaw, who maintains a lively social media presence, tweeted, “I have added to the COVID count by testing positive. Mild symptoms n [sic] I hope it stays that way.” Still, she continued to oversee Biocon from home as she recovered and even found time in September to participate in a videoconference interview with McKinsey’s Sathya Prathipati and Joydeep Sengupta.

Before we start, how are you recovering from COVID-19? What insights have you gained from experience?

My experience with COVID-19 was mild and uneventful. I did not experience a loss of smell or taste, nor did my oxygen saturation drop. I recommend to everyone with mild flulike symptoms to test and decide on hospitalisation or home quarantine based on the viral load.

I asked for the CT [cycle threshold] value to assess my viral load, and when I saw it was 23, I felt the load was safe enough to be homequarantined under telesupervision. Monitoring oxygen saturation several times a day is psychologically good for your virus-fighting morale.

I also recommend that you try and exercise or go for a short walk every day to keep fit. I did not experience any loss of appetite, and I suggest a diet of fruits, vegetables, lentils, and cereal. Soups and salads were a daily feature of my meals. My doctors put me on a course of favipiravir, azithromycin, and paracetamol. Apart from this, I continued with my daily dose of vitamin C, vitamin D, zinc, baby aspirin, chyavanprash, and, twice a week, a 200-milligram dose of hydroxychloroquine.

My constant companions during the period were online video-streaming services. I also avoided TV and social media, as negative news is bad for fighting COVID-19!

A highly-respected business leader, Kiran has been named among Time magazine’s 100 most influential people in the world

What are some characteristics that differentiate Asian companies?

While Western companies focus on value capture, Asian companies have tended to be really focused on scale, size, and market share. The Indian pharmaceutical sector has a huge global market share of vaccines and generic drugs—50 per cent and 20 per cent, respectively— but when you look at the value capture, it’s only 3 per cent. We have not really focused on innovation to capture value, whereas the Western model is to capture a big piece of the value share with innovation and IP [intellectual property] and to outsource whatever you need in terms of vertical integration.

An example of the volume-versus-value play is Apple, of course. Apple may not have a large market share of Samsung or others. Apple outsources its manufacturing globally, even as it closely guards the IP. On the other hand, Samsung wants to make almost everything itself and has built that scale to ensure vertical integration. That’s what’s happening in pharma as well.

Actually, I think it’s a good model for Asian companies. The question you have to ask is if everyone wants to pursue the Western model, who’s going to make the products? There’s merit in what Asian companies bring. But there is also an opportunity for Asian companies to innovate and mimic some of what Western companies do. This way, they’ll get the best of both worlds. India has to do a value-twin track of the services model—the generics model, on the one hand, and the innovative, high-value model, on the other. We need to know how to move up the value chain.

Is Biocon moving toward that?

Yes. We have built a vertically integrated model and pursued lower-risk products with predictable market opportunities. But, in the bigger scheme of things, we’ve taken higher risks than most pharmaceutical companies because biosimilars are higher risk in terms of regulations and, at the same time, offer higher value.

Now, given our skills and capabilities, we’re saying, “Look, we’ve got this nice bread-andbutter business; we should take higher risks and innovate, like Western companies. Let’s focus on the IP and getting the value share that we ought to.” This won’t happen overnight, but we took this bet a long time ago, and today we find that it is panning out for us.

We’ve invested in an antibody called itolizumab. We developed it and launched it in India in 2013 as a treatment for psoriasis. But I knew that India was not going to value this asset the way Western markets would, so I licensed it in 2017 to a US biotech start-up, which is developing it for niche orphan indications to address many unmet needs, like for graft-versus-host disease, which is a potentially life-threatening complication experienced by transplant recipients.

To get a deeper understanding of how innovation works in terms of the lab-to-market journey, we started a US company for some of our other assets, such as bi-specific antibodies1 for cancer. Instead of developing this in India and doing the trials here, doing it in the US would earn us credibility—and help us enjoy the value capture.

Has COVID-19 accelerated Biocon’s digital transformation, as it has at many other companies?

COVID-19 is a true inflection point. In India, e-pharmacies are becoming a reality, and we see a lot of opportunities to use technology in daily life. We need to leverage and build on that. There was so much resistance to e-pharmacies, but this is a new opportunity.

Biocon started its digital journey before COVID when we realised that a lot of our regulatory processes were archaic and too dependent on manual entries. We started digitising everything six or seven months before COVID and were able to finish before the pandemic. It’s given us a lot of benefits and showed the huge transformative potential of digital technologies.

In 2019, she was named the 65th most powerful woman in the world by Forbes

We have to look at digital ways to reach customers, patients, and prescribers. It is the way forward. The acceptance is not there yet. Many people are still not comfortable with it.

We need to be realistic. It’s all very well to say that everyone is using digital payments, but at the vegetable market near my house, the stall owners are not taking digital payments. I still see people walking around with wads of money doing business.

How then should we approach digitisation?

In a very thoughtful manner. Digitisation is not a panacea for everything. For instance, everything today is online, and the government is willing to allow you to do e-documentation, but the biggest problem is that they have basically done a cut-and-paste, in the electronic world, of what happens in the physical world—for example, documentation for a pharmaceutical license. In the physical world, you have to give the director’s name, their father’s name, mother’s name, bank card, this card, that card—the list goes on. Now, instead of being smarter and using an ID number with all of this data, they’re still asking for all this information individually. It shows that we haven’t learned what the digital world is about. Where’s the transformation?

Yes, the digital world has the potential to accelerate transformation, but you need to understand exactly what digital can do to get the benefits. In our business, data analytics can help us make decisions with lower risks. We just hired a CIO whose whole mandate is to look at our digital infrastructure and see how we can future-proof ourselves. We are thinking about this very carefully, not just a cut-and-paste. That’s why I would rather bring in people from the digital world—from the tech industry—instead of the pharmaceutical industry. We want them to transform old mindsets.

Source: Yourstory/ Mckinsey