Mint Pharmaceuticals has a prescription for competing against deep-pocketed multinationals: make their pain your gain.
In the case of this 11-year-old generic drug manufacturer based in Mississauga, Ont., the key to unlocking that particular formula was an insight about the opportunities created whenever the giant suppliers—the likes of Teva Pharmaceuticals, Apotex or Sandoz—are incapable of fulfilling orders from drugstore chains.
Under Canada’s federal prescription drug regulations, pharmaceutical companies must report shortages in a national database. The information about those supply gaps turned out to be the engine driving Mint’s growth.
For the first few years of its existence, Mint was a small drug maker selling off-patent prescription medications, which were often available from a range of other firms, many of them multinationals. But in 2014, says CEO Jaiveer Singh, the company decided to pivot: in a price-sensitive commodity business, going head-to-head against multinationals wasn’t working. Singh, Mint’s fourth employee, was a Columbia University business school grad who had worked for three years in investment banking in New York, until the credit crisis forced him to come back to Canada and start over. Just 36, he’s been CEO for five years and is now the controlling shareholder.
Based on input Mint was receiving from drugstore chain buyers, Singh moved to reposition the company as a “boutique” generic manufacturer, specializing in producing older drugs that the global players seemed unable or unwilling to keep in stock. The first was a diabetes medication. As Singh explains, many of these very large firms saw the Canadian market as small, fragmented and expensive to serve. A drop in Canadian business didn’t matter much to them financially. But Singh and his team knew some of those chronically out-of-stock drugs were also medically necessary; indeed, lurking behind all those out-of-stock reports on the national registry were anxious patients and frustrated pharmacists. Mint’s approach is a made-in-Canada strategy and has “resonated really well” with the firm’s retail pharmacy customers, independents as well as chains. Mint now has 55 generic drugs in its portfolio.
The company, moreover, has doubled down on its advantage by eschewing the practice of relying on third-party distributors to get its drugs to the chains. By taking full control of its shipping, Singh says, the company can ensure its customers have stock in hand when they need it.
This last part is key. Singh says his sales reps are constantly reminding customers, especially national chains, to diversify their suppliers so they don’t get caught short. The subtext: Mint is well placed to make sure those chains aren’t in out-of-stock positions on the drugs in its portfolio. That said, Singh also touts the fact that Mint is the sole Canadian producer of two popular generics—a hypertension drug and an anti-fungal medication.
The proof of the effectiveness of Singh’s boutique generic strategy can be found in Mint’s compounded annual growth rate—about 30% recently—and its standing with its customers: in 2017, Mint was ranked the fifth-most-reputable generic in a national survey of pharmacists. Says Singh: “We’ve worked very hard to make ourselves relevant.”