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Excise Raids Hit Novartis Distribution Chain

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Multinational pharma major Novartis India has received a minor setback in its distribution network following raids by excise authorities last month at a warehouse of one of its clearing and forwarding (C&F) agents.

Excise officials conducted a raid on the warehouse of a C&F agent following complaints of raised excise claims on some drugs of Novartis. Excise authorities have subsequently barred the agent from clearing anymore shipments of this drug.

Commenting on the raid, a company spokesperson said, "Due to this raid, drug supply was getting affected and we did not want patients to get deprived. So we decided to make part payments under protest thereby enabling the agent to clear the products. We are in talks with the authorities with respect to the claims raised by them."

The drug in question was a life saving drug, but Novartis executive did not give out the name. The company's net profit had declined last year to Rs 42 crore while its turnover was Rs 438 crore. The turnover, too, declined during the year by 1.8 per cent.

The results declared were the first for the amalgamated entity of Ciba CKD Biochem and Novartis. The profits were affected due to additional costs arising out of the demerger of its agribusiness, high levies, closure of Ciba Vision, amalgamation of CCBl and setting up the consumer health business.

Novartis' pharma sales declined by 3.6 per cent due to an overall slowdown in the market and sluggish offtake of rifampicin. On the other hand, its newly formed consumer healthcare saw a growth of 21 per cent.

The company introduced three new products in this year while it moved five products from the pharma division to the consumer healthcare business in order to promote them as over-the-counter products.

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