Navin Engineer
When Navin Engineer arrived in Britain in 1969, he was driven by a burning desire to work for himself, in contrast to his father, who worked for years in the Kenyan civil service. ‘I believed in working hard and wanted to be rewarded for what I did,’ he says. He founded Chemidex with his wife Varsha. ‘None of this would have been possible without her,’ he says. ‘She gave 100% support in running the shops and the pharmacies. You need a rock.’
They have two children, both of whom are studying medicine. Having sold its pharmacies, Chemidex is now a wholesaler of both branded and generic medicines, but not parallel-imported drugs. Engineer is in no doubt that growth in cheaper generic medicines has contributed to a more efficient healthcare market. ‘Wearing my hat when I am selling brands, I would say we need new molecules and new discoveries and we need to pump money into that,’ he says. ‘Fifty years ago, people were dying of tuberculosis and high cholesterol and we couldn’t transplant organs or, if we could, we didn’t have the drugs to make sure that rejection didn’t take place. But now we have drugs to do all these things and because of the budgetary pressures on the NHS, it has to look to save money.’
Navin Engineer’s story demonstrates the possibilities, even though his firm, Chemidex, is one of the few generic specialists that has not also expanded into parallel importing. He was sent to London in 1969 at the age of 16 to live with his aunt, with £75 in his pocket. He worked in the Wimpy burger restaurant on Oxford Street in the evening and at weekends to support himself through sixth form and then the London School of Pharmacy.
On graduation, he took a job as a pharmacist with Boots. Already feeling the company was ‘a little bit like the civil service’, he was infuriated by the demand of a visiting area manager for a cup of tea at a moment when he was busy dispensing prescriptions. ‘I made the cup of tea, but that night I went home and wrote a letter of resignation,’ says Engineer. ‘It was the best thing that ever happened to me.’
He set up his own pharmacy in Chertsey, Surrey, on the site of a former grocery store. He opened long hours, including Sundays, on the principle that ‘your body doesn’t decide to be ill when the shops are open’.
PillsHe expanded the business, even buying a former Boots store in Addlestone, near Weybridge. By 1999, he had 14 pharmacies and their value had increased after the government acted to prevent a free-for-all in the market by restricting the grant of new pharmacy licences. German group GEHE – one of three companies trying to consolidate the pharmacy market – came knocking. ‘They kept on increasing their offer until it was irresistible,’ he says. The final price was a cool £12 million.
Engineer chose to invest much of the proceeds in his much smaller wholesale business. He bought some small branded pharmaceuticals from big pharma companies, typically medicines turning over £2 million or less, and made instant savings by switching production to established factories in eastern Europe and the Far East.
Then he moved into generics, an area that requires specialist knowledge and a willingness to take calculated risks. Engineer reckons it costs between £200,000 and £250,000 and takes two or three years to develop a generic pharmaceutical. The first step is to identify the patent that is about to expire and then to make sure you do not infringe it as you develop a copy-cat version.
A patent lawyer alone can cost £50,000. ‘You have to make sure you are on firm ground,’ he says. ‘I would rather spend £50,000 doing that than get a writ from somebody saying: “You have infringed my patent”, and then you could get into a legal battle that could cost £500,000 or £1 million.’
There is also product insurance to be paid, plus the costs of proving the efficacy of the drug. ‘If it doesn’t work in the biostudy, then you have to start again,’ he says. ‘The regulatory authorities don’t have half-measures. The regulations are so controlled that generic products are of a very high standard.’
The hurdles may be high, but Chemidex now has 42 generics. They include treatments for gout and depression, an antibiotic for anthrax and even a generic version of the famous Prozac. They all contributed to profits last year of £9 million – not bad for a wholesaling business that was originally subordinate to Engineer’s retail pharmacies.
When Navin Engineer, now 51, arrived in Britain in 1969, he was driven by a burning desire to work for himself, in contrast to his father, who worked for years in the Kenyan civil service. ‘I believed in working hard and wanted to be rewarded for what I did,’ he says. He founded Chemidex with his wife Varsha. ‘None of this would have been possible without her,’ he says. ‘She gave 100% support in running the shops and the pharmacies. You need a rock.’
They have two children, both of whom are studying medicine. Having sold its pharmacies, Chemidex is now a wholesaler of both branded and generic medicines, but not parallel-imported drugs. Engineer is in no doubt that growth in cheaper generic medicines has contributed to a more efficient healthcare market. ‘Wearing my hat when I am selling brands, I would say we need new molecules and new discoveries and we need to pump money into that,’ he says. ‘Fifty years ago, people were dying of tuberculosis and high cholesterol and we couldn’t transplant organs or, if we could, we didn’t have the drugs to make sure that rejection didn’t take place. But now we have drugs to do all these things and because of the budgetary pressures on the NHS, it has to look to save money.’
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