Ever heard of the term "A Government of India Undertaking ..."! Yeah - government establishes such companies and leave it onto the company management to fetch for itself through the ups and the downs of the market. It is quite different from government firms where in the government actively looks into the financials of the company.
Hindustan Antibiotics Limited, HA in short, is (can any day become was) one such Government of India Undertaking to manufacture and supply penicillin and many other drugs. It had the monopoly in manufacturing first-crystal of penicillin until 1990. Private pharmaceutical companies, who used to create other products using penicillin, were not permitted and were not capable of manufacturing this first crystal of penicillin. Investment wise also it was too much for them. HA, during that period, taking advantage of this monopoly used to sell penicillin at around four thousand a kilogram. Public companies ruled during the so called License Raj (more on this in my earlier blog "Forgotten Ratna - P. V. Narsimha Rao").
With 1991 reforms came the end of License Raj. Private pharma companies were now allowed to manufacture penicillin. Apart from that there was cheap penicillin imported from China (costing Rs. 700 per kilogram - about 1/6th the price quoted by HA then) and of best quality. It is said that HA's penicillin was hard and in the form of lumps; whereas China made penicillin was free flowing. China's packaging of the penicillin was also far better than shabbily packed and hand sealed bags of HA's penicillin. With time a Netherland based company, known as Max-GB, took over HA's heart - penicillin manufacturing unit was leased out. They did not survive either - but at the same time left HA in far worse condition than it was when it took over that too in just a couple of years.
Where did things go wrong for HA?! Nehru along with government manufacturing factories also allowed worker unions. These worker unions are headed by politicians themselves or those who head worker unions turn to become politicians. These unions are still in place. They strengthen the employees. Some employees get full pays without being present in and around the company for a single day. Those who attend either sleep off their working hours or have laid back attitude. Where in the world do such companies prosper!
Second, HA had to manufacture penicillin and other drugs and supply it at cheap rates to government and military hospitals. When raw material is costly one has to bear the loss - but after all it is governments duty to serve the nation - but at whose cost!
Third, HA being a government undertaking, government funds are pumped in only if new machines are procured or new plants are setup within the company. Repairs do not make the management rich! Prefer new machines over small repairs becomes the policy!
Fourth, there are a set of protocols that are followed. If penicillin or any drug as such drops to the ground - discard it! Simple it is and has t be followed in a pharma company! Is it followed in private pharmas - all private pharmas? I have heard for instances wherein workers collect it, clean it and pack it. It happens in Indian private pharma companies. So they prosper and HA does not!
Fifth, HA has a big work force - there are two people hired where one would have worked. Heavy overhead!
Sixth, very sluggish research and development team!
To sum up its sorry story - it is whose-father's-what-goes (kiske baap ka kya jaata hain) attitude. Who is the winner and who is the loser?
With 1991 reforms came the end of License Raj. Private pharma companies were now allowed to manufacture penicillin. Apart from that there was cheap penicillin imported from China (costing Rs. 700 per kilogram - about 1/6th the price quoted by HA then) and of best quality. It is said that HA's penicillin was hard and in the form of lumps; whereas China made penicillin was free flowing. China's packaging of the penicillin was also far better than shabbily packed and hand sealed bags of HA's penicillin. With time a Netherland based company, known as Max-GB, took over HA's heart - penicillin manufacturing unit was leased out. They did not survive either - but at the same time left HA in far worse condition than it was when it took over that too in just a couple of years.
Where did things go wrong for HA?! Nehru along with government manufacturing factories also allowed worker unions. These worker unions are headed by politicians themselves or those who head worker unions turn to become politicians. These unions are still in place. They strengthen the employees. Some employees get full pays without being present in and around the company for a single day. Those who attend either sleep off their working hours or have laid back attitude. Where in the world do such companies prosper!
Second, HA had to manufacture penicillin and other drugs and supply it at cheap rates to government and military hospitals. When raw material is costly one has to bear the loss - but after all it is governments duty to serve the nation - but at whose cost!
Third, HA being a government undertaking, government funds are pumped in only if new machines are procured or new plants are setup within the company. Repairs do not make the management rich! Prefer new machines over small repairs becomes the policy!
Fourth, there are a set of protocols that are followed. If penicillin or any drug as such drops to the ground - discard it! Simple it is and has t be followed in a pharma company! Is it followed in private pharmas - all private pharmas? I have heard for instances wherein workers collect it, clean it and pack it. It happens in Indian private pharma companies. So they prosper and HA does not!
Fifth, HA has a big work force - there are two people hired where one would have worked. Heavy overhead!
Sixth, very sluggish research and development team!
To sum up its sorry story - it is whose-father's-what-goes (kiske baap ka kya jaata hain) attitude. Who is the winner and who is the loser?
