In this episode of the CEEC Debates, Vlad Savin is speaking with Michal Wieczorek, General Director of Davipharm (Dat Vi Phu Pharmaceutical JSC). Michal has got over 20-years-experience in pharmaceutical industry. In 2013-2019, he worked as a commercial chief officer for Adamed Pharma in Poland, Czech Republic, Slovakia, Spain, Russia, Kazakhstan, Uzbekistan and Ukraine. In December 2019, he moved to Vietnam, HCMC, to take over the position of General Director of Davipharm, a company of Adamed Pharma.
“Once Vietnamese pharmaceutical companies introduce international quality systems, they will become the perfect players not only on the Asian market, but across the globe. To bring this into perspective, all pharma export of Vietnam in 2019 were around 200 million USD (representing products of 500 pharma companies), which is equivalent of the yearly turnover of 2 medium sized companies in Poland. So the opportunity is enormous, once we transfer the technological know-how to Vietnam, and improve our core processes and standards.”
Vlad Savin: Adamed is currently present in 9 countries across the world, one of them being Vietnam. Since 2017 Adamed has been the owner of one of the most rapidly growing Vietnamese pharmaceutical companies – Davipharm. Why Vietnam and why now?
Michal Wieczorek: We have our presence in 9 countries indeed and it depends how you look at it. These are representative offices where we have official commercial structures, but Vietnam is the only country where Adamed has a production plant. However, you can find Adamed’s products in more than 70 countries around the world. Five years ago we have started our internationalisation plan, due to the significant growth of our company in Poland and we pursued two models: one is affiliate offices, as you mentioned before, Italy being the last one we just opened, but within our outsourced model, where we engage with distributors and their own sales forces, product sales is executed in more than 70 countries.
Davipharm is the consequence of our global growth and internationalisation model. Once we reach a certain threshold and a market position, we decide to enter the market and Vietnam was a logical consequence of our expansion strategy. We have been distributing our products here for over 5 years before buying Davipharm and I have been coming here as chief commercial officer at least four-five times per year, analysing the market and its opportunities. On the other hand, the Vietnamese economy is developing in a consistent manner, many international investors are expanding into Vietnam and there is major support from the government for local companies, thus we decided to look into the benefits of having a commercial presence in the country.
Vlad Savin: You have recently been named one of the top 10 most innovative Polish companies by a major newspaper. Your slogan is” Where innovation begins”, so obviously this is a major topic on each of your board meetings. What is your view on innovation in the pharma industry and how do you use it to create more value for your stakeholders?
Michal Wieczorek: Great question, especially for generic pharma company. In pharma, when you talk about innovation, you think about Big Pharma, which is totally inaccurate. Innovation is not only the act of bringing into the market new molecules, and by the way Adamed is developing as well new molecules in oncology and CNS area, under a costly and long process. But you can find innovation in many other areas, you can have generic products with added value, where the innovation is not in the product per se, but in the digitalisation tools used, in the communication with the clients and how you deliver the service to them.
Generic companies can be very innovative, and that is what Adamed is trying to do with different products, devices, digital tools and services. It is a part of my DNA to develop our strategy in these new directions, and this is exactly what we want to do in Vietnam.
We have a whole list of such creative directions, look for example at a case of sildenafil. Adamed was the first company in the world that registered and started selling the product over the counter (OTC) – without prescription, which changed everything – it changed how users interact with the product, the availability of the product for patients and generally the way of treating erectile dysfunction (impotence). Yes, Pfizer brought the original product to the market, but Adamed was the first company in the world that brought the first OTC version of the product, which is in itself an innovative exercise.
Another example of innovation is creating generic products with lower dosage than the original but with the same beneficial outcome. And in the pharma industry, lower dosage always means less side effects, therefore more safety. What we want in the end from our products is to be highly effective and extremely safe, with minimal side effects.
Our history in Vietnam is relatively short, however Davipharm has been able to already prove its innovative capabilities, by rebuilding an old factory and launching it under the European GMP quality standards. This month we will launch a new HP Zone in the factory, responsible for the production of high potent drugs, such as oncological products and steroids, requiring fulfilling the strictest safety measures in production. We will be the first and only company in Vietnam with the certified HP Zone for tablets and capsules (so called solid forms). Currently, in Vietnam there isn’t any company that can produce oncological products, thus Davipharm will become the first certified domestic high potent drugs manufacturer. This is huge and it impacts all relevant stakeholders: the patients, who can buy local products at a reasonable price, but it is also very important from the country drug safety perspective – the Ministry of Health has a great position by having local companies being capable to produce high-quality, certified products.
Vlad Savin: MedTech is a booming sector across the globe, alongside FinTech, EdTech and other rapidly expanding technologies which disrupt traditional industries. Has the pharmaceutical sector reached its mature phase and is it going through a disruption?
Michal Wieczorek: There are two different perspectives here. On a macro level, the pharma trade balance of Vietnam is negative. The country imports many expensive medicines from different countries, but it doesn’t export local drugs, because the quality doesn’t meet the international registration criteria and standards. Once Vietnamese companies introduce high quality systems, they will become the perfect players not only on the Asian market, but across the globe. To bring this into perspective, all pharma export of Vietnam in 2019 were around 200 million USD (representing products of 500 pharma companies), which is equivalent of the yearly turnover of 2 medium sized companies in Poland. So the opportunity is enormous once we bring the technological know-how to Vietnam and improve our core processes and standards.
Secondly, if you talk about high tech changes in pharma in general, digitalisation has changed everything. There are already products with microchips allowing to track the consumption and dosage through an application module; telemedicine as well is changing the pharma market due to the unlimited availability of the doctors, enabling patients to use products more easily, without visiting a doctor or getting a prescription.
Vlad Savin: Michal, if you were to hold a roundtable discussion tomorrow at your office bringing together government representatives and leaders from public and private sector, what will be the number one item you would place on the agenda?
Michal Wieczorek: Absolutely with no doubt – solving the critical issue of product visas (Marketing Authorisations). Basically, all pharmaceutical companies operating in Vietnam are afraid of loosing a big part of their products. The system in Vietnam is based on the Marketing Authorisation, a document that grants you the right to sell the product on the market. In most of the countries, this document is not limited in time – as long as you meet your periodical check-up and standard requirements imposed by Ministry of Health.
In Vietnam however, the system keeps Marketing Authorisation valid only for 5 years and then the process of the renewal is as tedious and lengthy as the first drug registration. Based on my information, it is the only system in the world that works this way. China had a similar approach some years ago but it was changed in 2015 due to the lack of efficiency. In EU countries the first drug registration is more complex, but still much faster and simpler than in Vietnam, while the renewal is almost automatic. With the rapidly growing number of molecules and products, there is no system being able to efficiently review all the registration documentation every 5 years, it is simply impossible. There is a gigantic number of product visa (Marketing Authorisation) extensions waiting for the approval and there is no clarity on how this major issue is going to be solved by Drug Administration of Vietnam (DAV).
If I submit my product to a tender today, I am under the significant risk if the next year the product visa expires and I don’t receive the extension on time. Consequently, I am jeopardizing the existence of the product itself and most importantly the patients’ wellbeing and life, as they may not have access to the most needed product when it is required.
This would be absolutely the main topic which have to be addressed. Any other issues can be seen, by comparing their significance, irrelevant for the time being, until the product visas situation is resolved. Taking this opportunity, I’d like to share my appeal to all stakeholders: Ministry of Health, DAV, hospitals, patient organisations, pharmaceutical companies. We need to sit and discuss all together all potential solutions to find the most suitable way and tailor it to the Vietnamese market model.
Vlad Savin: How do you bridge the culture gap between Poland and Vietnam and what are some strategic goals that you have set out to accomplish in your leadership here in Vietnam?
Michal Wieczorek: I’ve been dealing with different cultures almost all my professional career and Vietnam was not very new for me, as I started to be involved in the market around 8 years ago, before investing in Davipharm and moving here full time. There are of course challenges, differences, language barriers but I think there is a common attribute for all markets, when looking at the market expansion process and building your team: professionalism is a key – high level of skills, high level of knowledge are the most important attributes to create success. If you find the right people, with the right level of skills and knowledge, the other things become complementary and less important. Of course you need to focus on cultural differences and local strategy, but an individual who is professional in a specific field has an international language in himself, businessacumen, and I am proud to have a fantastic team here in Vietnam.
My ultimate goal in Vietnam is to create strong domestic drugs brands which consumers will associate with two attributes: 1. high quality and 2. affordable price. The second part of my leadership goal is to bring these products to the international market, by transforming Davipharm into a regional production hub first, and later on – into a global leader in pharmaceutical production and export.
Vlad Savin: How confident are you in the future of Vietnam on a scale of 1 to 10? And why?
Michal Wieczorek: We actually answered this question three years ago, when we assessed the opportunity of investing in Davipharm and decided to go ahead, therefore I am confident that the country is moving in the right direction. In addition, Davipharm has done fantastic during these challenging times, the government is consistently supporting local producers in pharma, and has been able to successfully manage COVID-19 pandemic, thus I am very confident in Vietnam’s growth: I say 9.