Vol. 5, No. 6-7-8 Jun. - Aug, 2001

Bayer Ag, with business in pharmaceuticals to plastic is streamlining its operations in India. The idea is to have less number of companies and have a lean structure. This comes as a result of their identifying India and China as key markets. Internationally Bayer is coping with the issues arising from the withdrawal of the heart drug Baycol and had mentioned that it may sell off its pharmaceutical business. The Bayer group in India includes Bayer India, Bayer Pharmaceuticals, Bayer Diagnostic, Bayer ABS, Bayer Sanmar (with recently acquired Sanmar group) and Bayer Indian Syntans. The range of products include agrochemicals, rubber chemicals, engineering plastics and pharmaceuticals. About 2,800 employees work for the group.

The group has also entered into a marketing and distribution arrangement with Biocare, an animal healthcare company to distribute its news products in livestock and pet categories. Biocare will also market the existing animal healthcare products. The partnership may, in future, market poultry and aquaculture products also. Bayer’s estimation of the animal healthcare market in India is Rs 840 crore which is growing at 12-14 per cent every year.

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Ranbaxy’s once-a-day anti-infective drug Ciprofloxacin NDDS (new drug delivery system) is expected to be approved shortly. This will be the company’s first product developed in-house. Ranbaxy is racing against the clock to launch the product in India before the international launch of Bayer’s Ciprofloxacin. Bayer is currently conducting phase III trials in the US, whereas Ranbaxy has already completed phase III trials in India.

Ranbaxy is also in the process of signing an agreement with Cipla for co-marketing Ciprofloxacin in India. It must be remembered that Ranbaxy already has a licensing agreement with Bayer for Ciprofloxacin, which will not affect Ranbaxy’s marketing the drug in India.

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The Gujarat government has prohibited the sale of Ringer Lactate, an IV fluid manufactured by Wockhardt Life Sciences, Biscolon, an ophthalmic solution manufactured by Conta Care Ophthalmics and IV sets manufactured by Max Medicare because of the tragedy in which 33 people lost their eye sight after undergoing eye surgery in Hargovandas Prabhudas Sad Vichar Eye Hospital. The Gujarat Food and Drug Control Administration has banned these products till the enquiry is concluded. A preliminiary inquiry had raised a lot of questions and testing of some samples taken from the batch has been cleared. Wockhardt authorities maintain that they continue to market Ringer Lactate in Gujarat and elsewhere. The samples have been sent to the Central Testing Laboratory in Kolkatta for further testing.

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Ranbaxy has announced receipt of around $ 17 million (Rs 79 crore) from Eli Lilly for selling 50 per cent stake in their former joint venture Eli Lilly Ranbaxy. All nominees of Ranbaxy on the board of Eli Lilly Ranbaxy will resign. Eli Lilly has formed a subsidiary in India. Ranbaxy will manufacture some Eli Lilly products which will be sold through this subsidiary. Both companies are reported to have an excellent rapport in spite of the break up.

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Indian pharmaceutical companies are concentrating on exports to overcome the slump in the markets in India. The export of bulk and finished dosages in the April-June quarter has shown double digit growth. Dr. Reddy’s Labs reported sales growth of 32.2 per cent over the corresponding quarter of the previous year. The domestic sales, however, increased by only one per cent. Export of bulk drugs and formulations shot up 83 per cent to Rs 150 crore. Cipla’s domestic sales grew 11 per cent but total sales growth was more than double at 23.2 per cent. The growth in exports was 70 per cent to Rs 85 crore from Rs 50 crore in corresponding quarter. Exports constitutes 28.5 per cent of total sales compared to 20.7 per cent in the corresponding period.

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It has been found that high-dose aspirin counteracts some of the detrimental effects of insulin resistance and may be the key to a new drug treatment for adult-onset diabetes according to researchers.

However, high-dose aspirin has too many side effects to recommend it as a treatment but it could aid in future drug development. Insulin is a hormone needed to convert sugar, starches and other food into energy. Adult-onset diabetes (also known as type 2 diabetes), is a metabolic disorder arising from the body’s inability to take enough, or to properly use, insulin. Insulin resistance, when the body does not properly use the insulin it makes, occurs because of a sedentary lifestyle, obesity, fatty diet and increased age. It can be reversed by exercise and weight loss.

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Zydus Cadila has consolidated its position in German Remedies in which it had acquired a 27.72 per cent stake. Zydus chairman Ramanbhai Patel has taken over as chairman of GRL. The company has also received a formal GMP certificate from the Bureau of Food and Drugs of Philippines to export oral solids, oral liquids, and small volume parenterals to that country. Zydus is only the third country to receive this certificate after Pfizer and Faulding. Zydus already has registered seven products in Philippines and is expecting approvals for 16 drugs.

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The National Pharmaceutical Pricing Authority has revised the prices of bulk drugs Rifampcin(from Rs 4,885 a kg to Rs 4,167 a kg), Dexamethasone (from Rs 118 a gm to Rs 114 a gm) and Dexamethasone Di-sodium Phosphate (from Rs 139 a gram to Rs 125 a gram). The price of Rifampicin has been revised on the basis of a study while the other two revisions are based on information under the provisions of the DPCO 1995.

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The proposed new pharmaceutical policy of the government of India has been jinxed because the health ministry has raised strong objection to the chemical and fertiliser ministry’s proposal to reduce the span of price control according to data available up to March 1999.

The health ministry is of the opinion that the condition for including drugs under the price control (the company’s turnover limit should be 20 crore and annual turnover from sale of bulk drug should be between Rs 5 crore and Rs 20 crore) should be made applicable to an updated list of companies and drugs up to March 2001. This would shorten the list of drugs under price control from 74 to 34. The health ministry wants the National Institute of Pharmaceutical Education and Research to update the data and therefore the delay in announcing the new pharmaceutical policy.

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Glaxo has announced a voluntary retirement scheme at Worli plant which is also applicable to corporate employees in its office in Worli. The Glaxo employees union has advised its members to take advantage of the VRS. The VRS will offer each employee basic and dearness allowance for the remaining years of service or Rs 5 lakh whichever is lower. Moreover, a fully taxable ex-gratia will be offered at the discretion of the management. The ex-gratia would be Rs 7.5 lakhs for an employee who has been employed for less than ten years and a maximum of Rs 8.25 lakhs for those between 10 years and 25 years of service. There is a hospitalisation benefit scheme for an employee or his or her immediate family if application is made prior to August 21. Glaxo is rationalising its operations since its plant in Worli is a high-expenditure location. The Worli office has a total of 700 staff (540 in the plant and the rest in the office).

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The Hyderabad-based Dr. Reddy’s Laboratories has emerged as the most valuable pharmaceutical company in India with a market capitalisation of Rs 7,154 crore. It has overtaken the market capitalisation of both Ranbaxy and Cipla. Currently Cipla has a market capitalisation of around Rs 6,512 crore and Ranbaxy has a market capitalisation of around Rs. 6,083 crore.

A combination of reasons have been attributed to the company’s rise to the top of the charts. Strong earnings growth, licensing deals with a leading multinational for a new molecule, the merger of two companies Cheminor Drugs and American Remedies and a 180-day exclusivity in the US to market an off-patent verion of Prozaz (an anti-depressant). FIIs have bought into the company with the recent hike in the investment limit to 49 per cent.

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The management integration of Pfizer (Rs 327 crore) and Parke-Davis (212 crore) is in its last stages with the top marketing and finance jobs going to Pfizer executives. Speculation is that this may be because the Pfizer managing director Hocine Sidi has taken over as managing director of Parke-Davis. The two companies are now associates since the merger of Pfizer Inc with Warner Lambert. Therefore, the Indian operations of these companies are being integrated.

Meanwhile Parke-Davis union has sued the company and Pfizer alleging ‘unfair practices’ following the integration of these two companies. Rreportedly some employees of Parke-Davis’ quality control department have been transferred to Pfizer’s corporate office. The union fears that most of their members will face transfers in the immediate future. The union also alleges that it was not taken into confidence at the time of the integration of the two companies.

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