Learning to live with COVID-19

With India crossing one lakh COVID+ cases, and Maximum City Mumbai firmly one of the hotspots, it is clear that SARS-CoV-2 has not been contained. But after three lockdowns, it is clear that we cannot focus only on trying to save lives. Saving livelihoods is as important. Thus just like the human race has learnt to live with HIV, TB and a host of conditions, we will need to embrace the new normal.

The pharma sector has been luckier than most other sectors, in the sense that demand spiked rather than died out as it was deemed essential services. And thus recovery too will be faster.

In a CARE Ratings report dated May 20, analysts crystal ball gazing on the road to recovery, predict that the drugs and pharma sector will be the third sector, after retail of essential goods and power, on the road to recovery in July.
The prediction is based on the fact that this sector does not have any of the challenges related to four major variables: labour, liquidity, logistics, lack of demand, and capacity utilisation.

As pent up demand for segments which were kept on hold, like women’s healthcare and orthopaedic pick up pace, logistics too will ease up. India will be well into the monsoon by then, with a spike in seasonal ailments. But even though most pharma companies were working through the lockdowns to meet increased demand, it was not Business As Usual (BAU). And in fact, employers and employees are realising that it might never return to the pre-COVID BAU.

The new routine of utilising deep cleaning services for the facilities is a new expense but avoidable for employers. Employees will have to convince family members that facing the risk of exposure is a calculated risk one must take.

And the risks are high. For instance, an employee of Gujarat-based Cadila Healthcare posted on LinkedIn the names of five colleagues and a family member of one, due tested positive for COVID-19 and passed away. Discussions on various private WhatsApp groups of pharma professionals put the total number of COVID-19 positive cases linked to Cadila Healthcare at 86, of which six more cases are said to be critical. However, as of May 22, the company says three employees passed away due to COVID-19 and put the total number of active COVID-19 positive cases at 31. (Check: https://www.expresspharma.in/covid19-updates/three-employees-of-cadila-pharma-die-of-covid-19-infection/)

Industry observers point out that as of May 22, there have been no reports of COVID-19 positive cases at the many other pharma and allied facilities which have also been working through the lockdown.

However, as the lockdown lifts and non-essential organisations open up, we cannot rule out the possibility that there may be COVID-19 positive cases at these facilities too. Thus, strict adherence to sanitisation and distancing protocols are critical to keeping the SARS-CoV-2 virus at bay. Staff will have to be made aware that these norms are required not just in the workplace but also while outside the facility, with family members as well as with other contacts.

Thus, even while jobs seem more secure in the pharma sector, will there be a backlash? Will the essential/emergency services tag deter fresh talent from general management roles like HR, legal etc., considering the sector?
Pharma companies and HR departments specifically will, therefore, have to engage with employees on this front with confidence-building measures. But though production continues, revenues and margins will continue to be tight, forcing managements to defer or cut down on hikes and promotions. Thus the focus will be on ways to reward deserving employees for their commitment, without impacting the wage bill too much.

One way would be to offer employees the chance to be shareholders themselves. There might be many examples of such companies in the pharma sector but I recently came across CDMO Recipharm’s share savings scheme. The Swedish company has been offering the scheme for six consecutive years.

All employees of the Recipharm Group can acquire savings shares series B in Recipharm at a market price up to a maximum of five per cent of each participant’s annual fixed. If these savings shares are held by the employee and the employment in Recipharm is kept over a three-year period, the employee will be allocated one matching share of series B free of charge for every two saving shares. In addition to matching shares, participants are also eligible for free additional shares of series B in Recipharm (performance shares), provided that the participant holds the savings shares, remains employed within the group for the entire saving period, and also fulfils certain requirements of performance.

According to Mark Quick, Executive Vice President, Corporate Development at Recipharm, almost 1,500 employees became shareholders through the 2014-2019 programmes, with approximately 450,000 Recipharm saving shares having been purchased. Based on the current total of 1,200 employees still holding shares, this represents a participation of 24 per cent of employees. The management board clearly sees the scheme as a good way to attract and retain talent, increase the sense of ownership and commitment amongst employees as well as serve as a good motivator for senior executives. (See interview: Share savings programme to attract best talent: Mark Quick, Recipharm)

Will such schemes become the norm in the pharma sector and in India as well? The talent pool has always lacked depth in certain critical areas, with recent years seeing key pharma formulation talent leaving India in favour of China and other Asian neighbours. Will the pandemic see a reverse migration of this talent?

Even though the sector will be more resilient than others, there are many issues which need to be sorted out. For instance, while the COVID-19 pandemic has united all stakeholders in the fight against the virus, it has also once again highlighted some long-standing fault lines in the sector.

For instance, patents. Can COVID-19 push us towards the unthinkable: a patent-free vaccine or patent-free drug? There are moves at the World Health Assembly to create a common patent pool so that all countries can access medicines and vaccines and not a few that can afford to buy in bulk and stockpile them.

Even though Gilead Sciences signed non-exclusive voluntary licensing agreements with five generic pharma companies based in India and Pakistan to further expand supply of the only approved medicine against the novel coronavirus, remdesivir, in 127 countries, there is criticism that the company has kept profitable markets out of the deal. Thus, more affordable remdesivir will not be available in these markets. There is also a move to pressure the Government of India to withdraw the patents awarded to this drug as it prevents other manufacturers from developing more affordable versions.

On the bright side, the race for a vaccine and medicines for this virus will hopefully renew investment in risky bets in research, by both the private sector as well as governments. After all, COVID-19 is not going to die out easily. Let us not repeat the mistakes of the past.

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