Among the Team Finland Italy co-operation during 2018 a couple of interviews were done about successful stories about Finnish Life Science companies in Finland. This is one of them!
Orion Pharma is considered a medium sized pharma in the global context. Currently it is present in 26 country with its own subsidiary. The distribution strategy of Orion Pharma for Southern Europe had been very prudential in the beginning. The initial mode of market entry was through distribution partners. The distribution agreements were signed previous years with big pharmas such as Novartis and Abbott, which had their eradicated sales organisations in Italy. The negative experience in the French market had also influenced the entry strategies to the whole Southern Europe area, but finally in 2008 Orion Pharma made the strategic decision on opening own subsidiaries in South Europe also in Italy.
The opening of the Italian subsidiary started with a key person search in 2008. The search process ended up in the selection of Gabriele Baccelli a 41 year old professional with an important experience in the pharma sector especially in the sales and marketing field. In addition he had a dream to start up a pharma business in Italy. This combination has been one of the main success factors of the story.
The subsidiary was founded in the beginning of 2009 in small office at the Regus office building in Cormano, in the outskirts of Milan. With a minimal team and 300 thousand of Italian turnover Baccelli started to work on the reorganisation of the sales function by closing active distribution agreements with the partners – this specific activity was mainly done by the headquarters and creating own sales representative network with local informatori scientifici del farmaco ISF as the sales forces are called in Italy.
Today after 10 years of dedicated work, the turnover in the Italian market has reached around 20 million € with a high profitability rate. The sales representative network covers all Italian regions. From the beginning of 2017 Baccelli was nominated Head of Region South Europe and he manages also the Spanish, Greek, Balkanic area and Portuguese markets. Thus the office in Milan has become the regional hub for the area of South Europe.
What where the success factors supporting the positive development and growth of the Orion business in Italy? First of all the importance of human resources, commitment of the persons and their wellbeing at their jobs. As a subsidiary of a Finnish company the working culture is notably different from the traditional Italian working culture. This shows in flat organisation structures, transparency of processes and finances. Communication and trust are fundamental for a successful international business relations between headquarters and the subsidiaries. In the beginning it wasn’t easy, explains Baccelli. We have been investing a lot of time and efforts in explaining how the Italian systems work differently and how should we tackle it. When the facts and figures arrived to support the communication, we reached a mutual trust, which has enabled the successful results. For example one of the desperate discussions were to explain to the Finnish managers used to the Finnish payment times of 7 to 14 days how the public payment times in Italy could be on average several months and even over 12 months.
In the year 2012 the office was moved to new bigger premises in the central area of Milan in Via San Gregorio. The head count of the Italian subsidiary had reached 25. The main products of Orion in the Italian market are in the fields of cardiology and anaesthesiology and respiratory diseases. The generics products, which cover the majority of the company’s Nordic turnover, are not a profitable business in Italy. This is what we call market expertise and adapting global strategy to local conditions. Looking at the local market dynamics in Italy, Baccelli elaborated a strategy for Italy consisting of two main directions: concentrating on high margin products and hospital pharmaceuticals.
The two top selling Orion products in Italy are SIMDAX (levosimendan), which is an inodilator indicated for the short-term treatment of acutely decompensated severe chronic heart failure (ADHF) and DEXDOR, an innovative alfa 2 agonist drug providing sedation without risk of respiratory depression and indicated for patient in ICU setting under mechanical ventilation.
Text by Jenni Makipaa, Finnica Consulting