HÉCTOR ARA

Spain 2021 | HEALTH & EDUCATION | VIP INTERVIEW

TBY talks to Héctor Ara, President of SUANFARMA, about almost three decades of the company's operations, pharmaceutical production, and the challenges of exporting to over 75 countries.

SUANFARMA was established 28 years ago and has become one of the leading companies in the development, production, and distribution of active pharmaceutical ingredients (APIs) for use in human and animal health. How did the company establish itself in this position?

After 15 years in the pharmaceutical industry, in 1993, I decided to develop a new business model. There was a generic drug law enacted in Spain in 1991, and an opportunity came about because there would be a paradigm shift in the Spanish pharmaceutical world. The product patent was also accepted in Spain as a result of its entry into the common market. SUANFARMA responded to this new environment and succeeded with the business model required to navigate this new situation. Our success is due to the fact that we have always been fortunate to have a great team on board, and we have had a global vision from the beginning.

What is the company's vision?

The company's vision is to serve the world with effective and affordable therapeutic remedies, namely generic drugs. In the pharmaceutical world, big companies are able to develop innovative treatments, which, on average, cost EUR2.5 billion, in addition to 10 years of research. When someone is able to develop an innovative drug, they get access to patent protection that lasts between 15 and 17 years. When this patent expires, the product becomes available to the world of generic drugs, and there is a possibility for smaller companies, such as ours, to encourage or address the concerns of laboratories and commercialise this product in competition with other generic drug manufacturers. This means drug prices can be reduced by up to one tenth and, in many cases, even less than what it cost under patent. This makes it affordable for public healthcare systems to access to these drugs in order to prescribe them to the general population.

Your main products are intermediates, human and veterinary APIs, and nutritional ingredients. SUANFARMA also has an industrial segment. What products do you offer and what do you focus on?

SUANFARMA focuses on the development of active pharmaceutical ingredients, which are the raw materials for making drugs. There are two worlds: prescription drugs, or medication that require a doctor's prescription and are strictly regulated; and non-prescription drugs. We have raw materials for prescription drugs that have active pharmaceutical ingredients as well as raw materials for nutraceutical products that are nutritional ingredients and do not require a prescription. In recent years, we have mainly focused on being a supplier of raw materials to pharmaceutical or nutraceutical laboratories so that they can manufacture drugs. SUANFARMA, through the Suanfarma Biotech fund, was recognized as pioneers in biotechnology investment funds in Spain in 2008. We raised EUR9 million and invested in nine Spanish research projects. We were able to make the fund 60% profitable, but, above all, we pushed ahead some of the most remarkable projects in the country in biotechnology.

How have you managed the pandemic, and what strategy did you follow to mitigate the impact?

For SUANFARMA, the most important thing is the people who make up the team and the main objective has been to take care of their safety. On the other hand, SUANFARMA is in the health sector and during the pandemic we have made an outstanding contribution to avoid shortages in the markets in which we operate. Some of the APIs we manufacture and/or distribute have been of great importance. This is the case of chloroquine or retrovirals which are used to help mitigate the effects of the virus. In addition, our medical adviser warned us of the importance of corticosteroids or heparin to prevent lung inflammation and cerebral thrombus, which were causing most of the deaths from COVID-19. We hope that we have contributed to help in their supply.

SUANFARMA has an international presence, exporting to more than 75 countries and with subsidiaries or representative offices in some of them. What are your main markets and your expansion plans?

Our main markets outside Spain are mainly the US, Mexico, and Central Europe. With our product offering, we have the ability to set up our own structure in countries with populations over 10 million. We are in particularly important countries such as Brazil, with more than 200 million inhabitants, where we have not been able to build a significant presence until now. We are strengthening our local structure with the idea of having a local subsidiary. We have made attempts in Bangladesh and Pakistan, though they do not yet have relevant consumption of the products in our range yet, so we have had representative offices with just one person.

How much do you invest in R&D, and how important is innovation for the company?

In the innovation department, we have several focuses. We have a company in Pamplona that develops pharmaceutical formulations for our customers, we have a unit in Madrid that works on alternative production routes, and we have a research center in Portugal. In the world of drug development, there are three basic technologies: fermentation, chemical synthesis, and extraction. In fermentation and chemical synthesis, we have a development unit in each of the areas in Portugal. Our intention is to be the only company in the world that covers these three basic technologies to develop drugs.

What is SUANFARMA's goal for 2021?

SUANFARMA's goal for this year is to increase our industrial capacity, develop our production capacity for innovative or existing generic drugs at better prices, and expand our facilities to meet demand.