Let me start by taking this opportunity to thank you for the support you have providedduring my first year as Managing Director of your Company. Among our most importantdecisions this year was a reimagination' of the larger strategy to shape theorganisation in a much more focused way around core customer needs.
Our business teams are now structured as Primary Care Critical Care Specialty CareVaccines Inflammation and Immunology and Consumer Healthcare with focus on productportfolio customer identification and go-to-market strategy that best addresses each ofthese segments. We believe that this approach will enable your Company to build veryspecific competencies on high priority therapy areas. Our strategy has received a strongendorsement from the global Pfizer organization expressing and extending support of theglobal Pfizer community towards achieving our goals.
Our reimagined' strategy also opened up opportunities to review and strengthenthe product portfolio. In this direction we have taken some of the most impactful stepspossible.
The respiratory portfolio was reviewed thoroughly during the year with an objective tolaunch new products that leverage the equity of our flagship brands while discontinuingthose that did not align with our portfolio plans. As a result we decided to discontinuethe manufacturing of Corex Cough Syrup (Chlorpheniramine Maleate + Codeine Phosphate) andintroduced Corex T (Triprolidine Hydrochloride 1.25mg & Codeine Phosphate 10mg) a newoffering that will better address patient and Physician needs. I am proud to say that thelaunch of Corex T has been one of the most meticulous and successful launches in therecent history of your Company and will extend the equity of the Corex brand to a widersegment of prescribers. We have similarly built upon the strengths of our major brandswith the launch of new products in the folic acid category and gastro-intestinal therapyarea.
With the acquisition of Neksium and Meronem we remain committed towards our strategyof both organic and inorganic growth. We continue to explore opportunities to bring ourglobal brands to India.
The pharmaceutical operating environment has been challenging for some time now and theyear under review was not different. Your unwavering support and trust in the Managementhas enabled us take important decisions in order to mitigate some of these operatingchallenges as best possible and set grounds for future growth.
Some of the key challenges faced by your Company along with the industry were
1. National List of Essential Medicines: The expansion of this list has hadan impact on your Company this year. A large part of our portfolio in therapy areas suchas Women Healthcare and Anti-infectives came under price control.
2. Fixed Dose Combinations: The year also saw continuing litigation on theFixed Dose combinations ban imposed by the Government causing loss of revenue due to theuncertainties around the future of these products. As we had stated earlier we fullysupport the intent of removing irrational combinations from the marketplace but not theprocess where products with due state and central approvals were also included in thislist.
3. Demonetisation: The policy decision to withdraw Rs. 500 and Rs. 1000currency notes had a short-term impact in the trade thereby impacting our business in themonths of November and December.
4. Medical Council of India (MCI) guidelines on generic prescriptions: Theconfusion around generic prescription prevails. The sudden announcement caught theindustry by surprise. As a country we are not yet ready for this and such regulationsneed deeper consideration before being implemented.
5. Goods and Services Tax (GST): As we started the new financial year theimplementation of GST led to significant down-stocking in trade channel and short-termrevenue impact.
We do strongly believe that some of these reforms such as demonetization and GST willhave a positive impact on the industry in the long-term. However the short-term negativeimpact will need to be closely monitored and mitigated where possible.
PEOPLE AND CULTURE
As we progress our greatest asset remains our People and Culture. Throughout the yearwe have undertaken several initiatives to build and invest in these capabilities. Ourfocus on the Field Force continues through to the current year with several newinitiatives to upgrade skills and develop talent in the field organization.
CORPORATE SOCIAL RESPONSIBILITY
I am happy to share that your Company continued to pursue an active CorporateResponsibility agenda during the year. Our flagship CSR initiative the PfizerIIT-Delhi Innovation and IP Program provided grants and resident incubation at IIT - Delhito the first batch of indigenous healthcare innovators this year. These young individualsand start-ups are developing important new innovations that can address some of India'spressing healthcare needs through novel products and solutions. Your Company has alsoinitiated a comprehensive partnership program with key stakeholders to combatAnti-microbial resistance one of the most significant challenges that India andindeed the world is facing today. Our Swachh Vidyalaya program grew from strength tostrength this year with an expansion to new territories including Delhi Lucknow Haryanaand Goa. Pfizer colleagues volunteered to build sanitation facilities in schools toprovide this basic human right where it did not exist earlier.
In summary FY 16-17 has been a year of laying foundations for success while navigatingthrough an unpredictable and challenging operating environment. I am reassured of theresilience of your Company to face and succeed in a volatile environment as also itsagility to spot and invest in growth opportunities. The focus remains on our businessfundamentals i.e. product portfolio augmentation in core therapy areas innovativego-to-market model investing in building capabilities and culture. And while doing so wewill continue to be ethical and compliant as that is the core of our operating principle.
As always I look forward and seek your support towards building your Company's growthstory.