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According to market research firm IMS, Pfizer has achieved the most effective product launches among pharmaceutical majors in India. It has generated sales of Rs 54 crore in 2001 from a six-product portfolio launch. The sales from new products of Rs 9 crore per product are the highest amongst pharmaceutical companies (taking the average sales of newly launched products). The launch sales productivity of other companies studied in the survey are: Aventis Pharma (Rs. 6.1 crore per product), Wockhardt (Rs 2.5 crore per product), Lupin (Rs 2.5 crore per product), USV (Rs 2.2 crore per product), Glaxo (Rs 2.2 crore per product), Torrent (Rs 1.9 crore per product), Wyeth Lederle (Rs 1.8 crore per product), Knoll Pharma (Rs 1.6 crore per product), and Ranbaxy (Rs 1.6 crore per product).

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The US-based Pharmacia Corporation which acquired a controlling stake in Abbott Laboratories (51.5 per cent) recently is planning to launch a slew of new products in India. Pharmacia Healthcare will be the new name of Abbott. Besides this Pharmacia has a wholly-owned subsidiary based in Gurgaon called Pharmacia India. The companies together have a field force of 491 and they will be deployed in marketing these new products. However, a merger of these companies is not foreseen but they will reach a co-marketing agreement. Also a delisting of the erstwhile Abbott (a listed company) is not on the cards.

The new products proposed to be launched this year are: Aromasin for breast cancer, Healon 5 for cataract, Caverject for erectile dysfunction, Detrusitol for overactive bladder and Medrol for asthma and allergies. The combined sales of the two companies for the year ended February 2002 is estimated at Rs 123.5 crore with a market share of 0.8 per cent of the Indian pharmaceutical market. The joint entity now ranks 37^th in the list of top pharmaceutical companies in the country. The company also proposes to start a clinical data management centre in Bangalore this year. The centre will undertake entry and processing of data generated throughout the world by Pharmacia’s clinical trials of drugs.

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In a surprising development GlaxoSmithKline, the global $ 30 billion pharmaceutical giant, has initiated discussions with Indian companies for marketing products discovered by the latter internationally. The company’s CEO Jean-Pierre Garnier is reported to have been impressed by the research and development being done by companies in India and would like to market them abroad. This is a welcome change in position from Glaxo’s fight with Indian company Cipla over supplying of cheaper AIDS drugs in Africa.

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Lupin’s US-based marketing partner Apotex is expected to obtain approval to launch a crucial antibiotic in the US shortly. Lupin supplied the bulk drug cefuroxime axetil, the key ingredient in Apotex’s antibiotic. The delay in launch has been because of a patent infringement suit filed by Glaxo against Apotex. Lupin has exported $ 3.5 million worth of cefuroxime axetil to Apotex. Another order for $ 3.5 million is pending shipment. The market for cefuroxime axetil in the US is estimated at over $ 300 million and Lupin is expecting $ 12 million in sales from this product.

Lupin also has a collaboration with Apotex to supply it with the bulk drug lisinopril, a cardiovascular product which will go off-patent in June. In anticipation of this Lupin is investing Rs 17 crore in an additional manufacturing plant for lisinopril which will be commissioned in February 2003.

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May 29. Dabur Indian has tied up with Sobhan Pharma of Iran for an anti-cancer drug manufacturing facility in Iran. Consisting of three phases, in the first phase Dabur will supply the equipment, technology and consultancy to the Iranian company. Concurrently, Sobhan will import anti-cancer formulations from Dabur India for three years. Once the plant is in place Sobhan will import the raw material for its formulations from Dabur. Dabur gets 8 per cent of its turnover (Rs 1,166 crore) from cancer-related drugs and has launched a molecular diagnostic laboratory in India. This will used the latest diagnostic methods based on genomics and proteomics profiling of molecular changes to diagnose and treat cancer. Already it has set up a molecular diagnostic and flow cytometry laboratory for cancer diagnosis at the Rajiv Gandhi Cancer Institute and Research Centre.

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JB Chemicals and Pharmaceuticals has entered into a joint venture with the US-based NeoTherapeutics, to be called NeoJB to take JB’s products through the market registration process in the US. NeoJB will eventually sell JB’s products in the US market. The initial investment is $ 20,000 (Rs 10 lakh). NeoTherapeutics’ mainstay is discovery and development of central nervous system drugs, in-licensing and commercialisation of anti-cancer drugs and licensing of new drug targets discovered through genomics research. NeoJB will start with OTC products like the Doktor Mom range and then graduate to off-patent drugs like the antibacterial metronidazole.

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May 2. Parke-Davis India (PDI) has stopped operations at its manufacturing plant at Hyderabad. Around 188 employees of this plant have accepted a voluntary retirement scheme (VRS) offered by the company. This was announced at the annual general meeting of the company. The VRS has cost the company around Rs 22 crore. The closed plant manufactured the popular antacid Gelusil. The mumbai manufacturing plant was closed down some time ago and the Hyderabad plant was the only manufacturing unit. PDI will ultimately be merged with Pfizer India, its sister company in India. The merger will come into effect by the end of 2002. This merger came into effect following Pfizer’s merger with PDI’s parent Warner-Lambert. The operational merger has taken effect and the legal merger will follow soon. However, arrangements have been made with third parties to keep the product lines going.

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With a view to cutting down its activities in India GlaxoSmithKline has put its Ankleshwar facility for sale. The huge Ankleshwar facility measures around 50 acres and manufactures anti-ulcer bulk drug Ranitidine, Glcochovine and Cefalexin. The company must have found that Ranitidine is available in the market at lower prices than its own product and reportedly this must have been the cause of the closure. Apart from the plant, the guesthouse, machinery and the property has also been put up for sale. Earlier the company had offered voluntary retirement scheme (VRS) at its plant in Worli. The thrust seems to be to rationalise the product mix and reallocate resources to a smaller basket of brands.

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May 13. Reportedly, Morepen Laboratories is understood to be in negotiations with Novartis for acquiring the latter’s $ 10 million dietary supplements business. This will bring Novartis’ products like multi-vitamins and chocolate-coated calcium to anti-depressants and cardio vascular drugs into the Morepen fold. Novartis was eager to get out of this segment, as it was not a core area. This will give Morepen access to the US OTC market and also marketing rights world wide. These products will also come to the Indian market when the sale goes through. The acquisition will be arranged through Morepen Max, a collaboration between Morepen and the Drugmax ($ 270 million US pharmaceutical distribution company. Morepen holds 51 per cent and Drugmax hold 49 per cent in the collaboration). Morepen Max will now have seven OTC products in the US market. Morepen Max will take care of the ANDA filings of Morepen in the US. Dr. Morepen, a subsidiary of Morepen, had earlier acquired the OTC product Burnol for Rs 8.9 crore from Reckitt Piramal. Now Morepen’s OTC portfolio in the US includes: Calciwise (a chocolate-coated calcium tablet), Envigor (a multi-vitamin), Flextend (a muscle relaxant), Forsight (a vitamin for the eyes), Memorable (a memory enhancer), Staycalm ( an anti-depressant) and Veintain (a cardiovascular drug). The New Delhi-based Morepen has earmarked Rs 50 crore to acquire OTC products in its thrust to strengthen this core area of business.

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April 30. The Ayurvedic major Baidyanath (sales: 200 crore) has acquired the Nagpur-based Puma Herbal. This acquisition will help Baidyanath enter the ayurvedic beauty-care segment. The deal is expected to have been closed around the Rs 5 crore mark. The company is targeting consumers from smaller cities, provincial towns and metro suburbs.

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The Hyderabad-based Shantha Biotechnics is considering offloading 40 per cent equity and bringing in a strategic new partner into the company. The company intends to pump in this investment into a facility that it will be constructing at Hyderabad. The unit is expected to produce around 12 products and will be ready around mid-2003. Reportedly, the company has a combination vaccine of hepatitis B and DPT, a clot-removing drug streptokinase and a human granulocyte colony stimulating factor (GCSF) drug in advanced stages of development. The drugs are expected to be launched by March 2003. Shantha had raised Rs 50 crore by divesting 6.9 per cent to Morgan Stanley Dean Witter and SBI Fund Management in September 2000.

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As a prelude to 2005 and implementation of the WTO regime, Indian companies are gearing up to meet the coming challenge. The leader, Ranbaxy, is making its first moves. Being the largest Indian pharmaceutical company, it has outlined plans to re-arrange its Indian operations in a project codenamed "Pyramids." The project is expected to be completed in the next six months and will prepare the company to meet emerging challenges in the post-2005 scenario.

"Pyramids" has been envisaged with vital inputs from C Marc, a Kolkata-based prescription tracking and management company. Ranbaxy’s operations will go in for decentralising of business and sales and creation and re-alignment of three new strategic business units (SBUs). The project also envisages centralising marketing at operational levels around two hubs – Mumbai and Delhi – and creating a strategic marketing cell to provide therapy management and matrix reporting for managers.

The revamped three SBUs (Ranbaxy has six SBUs now) will consist of: one for hospital products, another for cardiovascular and another for super specialities (mainly relating to oncology and nephrology products). Products across the line will be re-aligned into these three SBUs. The company is also considering talents from outside the industry especially from service industry. While there will be no downsizing there will, of course, be re-deployment of human resources.

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May 22. Pfizer India has roped in advertising major Ogilvy and Mather to embark on a corporate campaign aimed at familiarising the customers and business partners with its products. The campaign will break by end-May and will last till early-June and will be the company’s first effort of this kind in its 52-year history.

The company wants to be seen as a premier pharmaceutical company, a good employer and a responsible partner for Indian companies wanting to do business with it. It feels that health-conscious consumers are taking more interest in the companies behind the drugs consumed. This campaign comes at a time when it is moving to merge with its sister company Parke-Davis that will propel the company into the big league. The two companies combined will rank fourth in India which is way above Pfizer’s eighth position and Parke-Davis’ twenty-second position. Ogilvy and Mather, which is handling the campaign, has a dedicated healthcare team and is looking forward to the massive campaign to unfold.

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Indian manufacturers of vitamin C bulk drug have requested the government to impose anti-dumping duty on imports of the drug from Canada and the US. This follows the large imports from these two countries in the recent past. The prices offered have been lower than the rates prevailing in India.

While vitamin C in India is sold at $ 8 - $ 10 per kg, the imported variety is available at almost half the price. At the same time the prices of Vitamin C in US and Canada are well above $ 10. Ambalal Sarabhai and Amoli Organics are the two manufacturers of Vitamin C in the country. Vitamin C is used mainly to manufacture the ready to consume multi-vitamin tablets. It is feared that since the government imposed anti-dumping duty on imports from China, the versatile Chinese have found conduits in US and Canada to dump Vitamin C in India. In many countries becoming a member of the local chamber of commerce is enough to get a certificate of origin of that country. The market for Vitamin C in the country is estimated at 1,800 tonnes per annum while the supply of locally manufactured Vitamin C is 400 tonnes. The balance demand is met by imports.

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Growth rates of Indian and multinational pharmaceutical majors in the Jan. – March 2002 period are given below. Indian companies continue to show healthy growth rates compared to their multinational contemporaries with GlaxoSmithKline still showing negative growth.

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Ranbaxy’s stock rose by over 9 per cent on the news of the company benefiting from a US court ruling invalidating GlaxoSmithKline (GSK) patent on the antibiotic Augmentin. Ranbaxy, Geneva Pharmaceutical (of the Novartis group) and Israeli Teva Pharma had sued to nullify three patents that protected GSK’s Augmentin from competition so that they could launch generic versions of the antibiotic. GSK is expected to appeal the ruling. Ranbaxy is awaiting approval from US FDA for its generic version and is scheduled to launch the product by the end of 2002. Ranbaxy has been doing well in the US market during the period Jan.-March 2002 with sales of US $ 51 million compared to its Indian sales of US $ 40 million.

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A recent ORG-MARG study has found that pharmaceutical companies can achieve better sales if some of the drugs now sold only by prescription can be brought under the over the counter (OTC) category. OTC products can be promoted through advertising and the margins on this segment are better than prescription drugs. Many of the drugs now sold through doctors’ prescriptions do not figure in the schedule H of the Drugs and Cosmetics Act (Schedule H drugs cannot be sold without a prescription and cannot be advertised). Despite their not figuring in Schedule H, the reason why companies are promoting these drugs through doctors’ prescriptions is because of the huge advertising and promotional costs involved in promoting an OTC brand. However the study feels that barring the initial costs of launching the product, the sales in subsequent years can offset the initial investment.

For example vitamins are not in Schedule H or in Schedule G yet they are promoted only through doctors. About 69 per cent of antacids sold in the market are not in Schedule H but are sold through prescriptions. Likewise 86 per cent of cold remedies, 46 per cent of antipyretics and 37 per cent of cough medicines don’t fall in Schedule H.

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