Read the Conversation
EF: What were the key decision factors to move from Sandoz to Grupo Somar?
DC: It was both a personal and professional decision for me. I have been in Sandoz for six years, and I left being the Country Head for Sandoz Mexico, which was a Mid-sized country for the group. What really engaged me was the possibility of making the company grow and be recognized on an international level. Through the help of private equity, we can manage that.
Also in big multinational companies, the expectation is that you move frequently once you are in the country head roll. As a professional decision, I wanted to have full empowerment. Being in a multinational company as the country head is not the same as being the CEO of a company. Grupo Somar approached me with this opportunity of having three plants in Mexico, with almost a thousand two hundred employees and really having all the tools to make it work, grow and expand.
EF: What are your priorities for this year?
DC: One of the priorities is growing the Generics & Private labels unit called Serral. This is the biggest access tool that we have in order to get many patients.
Then we have another brand specialized in dermatology that is called an Advaita, a branded generic company that is only popular in developing or emerging markets. Lastly, we have Lakeside, which is focused on anti-infectives and pain (primary care).
Last year we produced around 35MM packs of products. That means to me that we are basically giving health to 35MM patients. The key priorities for the company are to be a well-respected company in the Mexican pharmaceutical industry and to give access to health and quality medicines to patients. For this year, we had to readjust our plans based on the global context. However, the essence stayed the same. We are aiming to double the sales of the business in the next three years, increasing the patient base and helping them to access quality and affordable products.
We readjusted our plan with the global situation, in order to serve not only Mexico but the entire region to go through the Pandemic. We are accountable for almost 50 percent of all the production of vitamin C in Mexico. Now we are noticing a spike in the needs.
We’re going to have to produce almost twice the amount that we produce every year. So that’s something that was not expected. And it’s something that you never know and it’s a good thing that we have a very reliable supply chain and we’ve got a really good manufacturing center in Mexico. And we were able to spike up production in order to meet demand.
EX: You have 4 divisions, what is the strategic importance of each business division to Grupo Somar.
DC: Each division has its own strategic purpose. For suture and needles, we have a specific plant close to the US border where we produce, for example, catgut and nylon sutures. We provide the Mexican government and also export to the US although it is not very strategic, it solves a basic necessity.
Serral is the biggest in terms of units, it represents 85% of our sales in units are generics.
For me this strategic piece of sort aisle is accessed and it’s bringing high-quality products to patients. Private label is very strategic, they have between three or four big players in Mexico. Between the biggest players they have more than ten thousand points of sales. So that is a key access strategy for. For anyone that really wants to play and to have an impact in Mexico. We’re definitely in the top five players in that sector in Mexico.
In regards to the dermatological franchise, which is Advaita, we are leaders in Mexico for anti acne products, atopic dermatitis. And we just launched a scar and healing franchise. The strategic priority for Advaita is making people feel good in their skin. And that’s our motto.
For Lakeside, the strategic reason is having primary care really high quality and affordable products specifically in an area that is one of the key priorities of healthcare in the future, which is anti-infectives. Scientists say that in 2050 more people are going to die from basically antibiotic resistance than people that have diabetes or cancer or hypertension.
It’s a very big medical necessity in Mexico, to explain to the physicians that they shouldn’t use antibiotics when they’re not needed, because of this antibiotic resistance.
I think there are more than ten thousand doctors’ offices that are next to our pharmacy stores in Mexico. This means that it is as big as the Social Security system in the first contact. I think that we really need to educate not only the consumers or the patients but also the physicians in that space.
This is why we are investing in campaigns and education, as we want our products to still be effective, and people use them in the right way.
EF: In the past few years, we’ve seen multiple phases of great transition and change. In 2019 You saw the role of a new presidency, this year. You’re seeing well it’s quite obvious like Corona is changing the game for everyone. What your advice is to other managers in managing in a time of transition?
DC: Because we are owned by PE, Private equity usually doesn’t wait for the problem to arise, but they try to tackle it beforehand, they de-risk all issues in advance.
Our response has to be congruent with the mission and vision. Because that’s a key priority for dealing with these discrepancies. So in that sense, we asked everyone that could do a home office from our corporate side and from our sales teams to help to fight the pandemic. But we are actually working to 100 percent capacity in our production safe because we are actually seeing an increase in demand. So we need to do where we’re doing a lot of effort in terms of sanitization, hygiene and we’re helping as much as we can our employees in the production site.
EF: In times of transformation and uncertainty you really need to go back to your roots, focusing on your vision and mission. Where do you really want to make a change in what we do or in society or how can you help?
DC: We have a potential medication for malaria that could be developed as a treatment for COVID 19.
We are increasing the resources behind that and we are putting that aside as a first priority in order to help. If it basically turns out that it is a possibility to help, we could be able to launch it as fast as possible. So it also changes your priority. That’s the example that I wanted to give. That it changes your priorities and that it makes you really re-establish the key guidelines that you will have that year.
In terms of crisis management and how you handle it, I think it really puts you in your test. If you go back to your purpose and your mission and be shown, it helps you really to clarify your work your way forward.
EF: Would you say that there were any learnings in your Sandoz experience that helped you with this?
DC: We launched that complete HIV franchise in Sandoz, Mexico, which is also a very important space and a very important piece of Public health issues.
For me it was very relevant experience in Sandoz because we started to think about that launch four years before because there was a patented product still in Mexico and we found a way to do a different formulation in order to give access. In the end the access component in Sandoz can be transferred to Grupo Somar.
For me, in that 4-year timeframe, we had to make a commitment four years before the launch. In order to make something happen, you have to start planning for it now to get results in 3-4 years.
EF: After this pandemic is over, how do you propose to keep the same amount of interest and activity in terms of investment in healthcare?
DC: I did my masters at Imperial College and I was reading an article about the projections.
The articles describe that the world is and is not going be the same after this pandemic outbreak. Processes will be in place to prevent the risk of this happening again. And I think that’s going to be that’s going to be a norm. The Bill and Melinda Gates Foundation have been working very hard on this, and they forecasted that the next big crisis for their humanity was going to be a virus. And now we’re experiencing it.
This pandemic, because of the magnitude that it had, which is much greater than H1N1, it’s going to have an impact in the way that the governments really think about health and how we can both fall within that.
This is teaching us to put emphasis on this type of situation in healthcare in general. It’s going to show that our healthcare systems are not that robust and that we need to work on them, and that we need to invest in how to handle these situations.
EF: Do you have a final message you would like to send now from our perspective, from a millennial CEO perspective?
DC: We need to really step up and start making the decisions that will cost the next generation forward. The next wave of CEOs needs to be bold, not only in healthcare, but a lot also in tech building technology and in immediately every other industry. I think that we really need to go back to what we really want to give our next generation of our kids to look forward to.