The Italian pharma market is going through a significant change in structure and competitiveness. We talk to Massimiliano Rocchi, Managing Director of Accord Healthcare Italia, a relative newcomer to the Italian healthcare market. Rocchi is the winner of Business Worldwide Magazine’s awards in the category of Most Innovative CEO of the Year, Italy- 2016′ and ‘Growth Strategy CEO of the Year, Italy- 2016.’
The pharma market in Italy is important. According to a report by Pharma Boardroom in 2016, the pharmaceuticals sector has 174 manufacturing plants, has 63,000 employees and has a manufacturing value of €29 billion. It has led on export growth (71% compared to 38% in manufacturing overall, for the past five years).
Most of Italy’s pharma industries are family owned, say medicines4all Pharma Boardroom, which allows for innovation and flexibility but not growth. It has been estimated that Italy will drop from fifth to eighth place in the international pharmaceutical ranking by 2018.
Accord Healthcare Italy – founded in 2008 – is a newcomer to the Italian pharma market. Accord is a fast mover, arguing that because it s a vertically integrated company, with three EU GMP approved manufacturing plants and an EU packing site near Cambridge, UK, it can ‘bring high-quality medicines to patients faster, more economically and with greater innovation than its rivals.’
Massimiliano Rocchi is Managing Director at Accord Italia. Business Worldwide talked to Rocchi about the pharma business, his role in the company, and how the company is seizing the initiative in the Italian healthcare context.
Why did Accord set up in Italy and what does it do?
Accord deals almost exclusively with the hospital sector. Italy, however, offers the potential of entering in retail business in the future, and so we could potentially expand quite quickly.
We feel that the generics market is still underdeveloped in Italy as compared to other European countries. We could as a result significantly increase our market share over the next three to five years.
What’s the state of the healthcare market in Italy?
Just from the point of view of what we do as a business, we’ve noticed that hospital pharmacists have changed their ordering behaviour in the last ten years. Everything has been sped up because their safety stock is far lower than it used to be. Whereas ten years ago we had two or three weeks to deliver stock, now its two days. Logistics has become critical, therefore.
Why has Accord Italy been so successful in this market?
The Italian healthcare market is extremely competitive, but we’ve broken through to become one of the top six companies in Italy. We managed this for two reasons, I think.
The first one is that when we’ve launched a new product, we’ve got it on the market from day one. Any delay in product launch will drive the price down and will mean a loss on market-share. You have to consider everything before you launch – logistics, regulations, IP, and so on. You also have to coordinate across the EU countries.
The second reason we’re so successful is that we are competitive. We have vertically integrated all our operations so that we manage the entire value chain, and that has given Accord a significant competitive advantage throughout Europe. For example, we have an MHRA-approved packaging site in the UK, near Cambridge, which allows us to react quickly to increases in demand.
Generic healthcare is particularly competitive. In Italy our main clients are hospitals, and in the hospital sector volumes and consumption are static, and the prices are declining due to competition. There are three responses to this – one is to give up, the second is to invest in R&D, and the third is to try and improve the practical delivery of the products, to make things more efficient. At Accord, we are going for the third option, very successfully.
What is your ‘unique selling point’ as a company?
I think our unique selling point is that we are so efficient. The EU Directive 24/2014 means that hospital procurement processes relate 100% to price. But it also means that tenders have to be compliant with MEAT – the ‘Most Economically Advantageous Tender’. It means that hospitals have to develop a list of defined criteria to say why a particular product best meets their need.
Accord, with its investment in the practical side of product delivery, is best placed to take advantage of this kind of transparent procurement. It’s what makes me proud to work for this company.
What is ‘Kit Appunti di un Viaggio’?
It’s a cancer patient-orientated programme. The idea originally was to provide oncology patients with a ‘diary’ where they could record side-effects of medications, or any other issues they thought were relevant in their treatment.
We’ve found the diary has benefitted patients in their conversations with physicians, both regarding bringing potential complication to the attention of physicians but also that patients welcomed having somewhere to record their experiences. We also offer lifestyle and diet advice in the kit.
It’s just one way that we have shown a commitment to the healthcare community.
What do you have planned for the future?
Logistics will remain crucial for us. As we expand – as we plan to do – we’ll need to find a partner who, like us, sees logistics as offering a competitive advantage.
We also need to manage our tenders. In 2012, we had one tender for each hospital, so 600 different tenders.
Now, we tender by region, so now it’s 20 tenders. We’d like to move to deal with stakeholders at the regional level based on the MEAT process, to ensure quality not just tendering on the basis of the lowest price.