Cipla plans to double share from consumer health business in 5 years

Transitioning brands from prescription and trade generics to over-the-counter

Cipla, the country’s third-largest pharma major, aims to more than double the contribution from consumer hea­lth business to its overall global turnover in five years. 

The consumer health business now accounts for 5-6 percent of Cipla’s overall turnover, and as Kedar Upadhye, global chief financial officer (CFO), Cipla, put it, the aim is to take that beyond 12 per cent in the next five years. 

Upadhye said, “Focus on wellness is on the rise. There is a shift from focus on illness to wellness. Our consumer health port­folio, which has strong brands like Nicotex (helps to quit smoking), Maxirich (multi­vitamin), MamaXpert (pregna­ncy test), has the whole ra­nge of wellness products, not just nutraceuticals or minerals.”

The focus on consumer health or over-the-counter (OTC) products has been a work in progress at Cipla. It has been realigning its India business to leverage the potential of brands across its different businesses in the OTC space. 

For example, it has adopted what it calls the One India strategy. “There are many brands that are part of the trade generics business have a very high consumer potential. We have announced the scheme and will move these brands from trade generics business to our consumer health business. We will take necessary approvals from the regulator for this. This will help to build our consumer health business stro­ngly,” Upadhye said.

Trade generics are drugs that are pushed directly to trade and not promoted through doctors. 

Cipla now plans to monetise and expand the wellness portfolio across geographies and make very determined capital allocations. “We will make appropriate investments to make this business grow. We are open to organic, inorganic route expansion; co-branding, alliances, and tie-ups too,” Upadhye added. 

In the past one year or so, several brands had a portfolio transition under the One India strategy — Prolyte (ORS), Mama­­Xpert, Maxirich etc. made a switch from being prescription brands to OTC. As the pandemic broke out, Cipla lau­nched the Ciphands portfolio, including sanitiser, hand-rub, and surface disinfectants. 

The firm has adopted a 3-year strategy to build core wellness brands like Nicotex, Cofsils (cough lozenges) Uno­Biotics (probiotic) etc. Cofsils grew 50 per cent in FY20, and Cipla then launched new flavours for this cough lozenges. 

The work had begun in 2019 when Cipla started reconfiguring its trade generics business. It rationalised its channel incentives and also the channel partners, and revamped its domestic distribution business in the first quarter of FY20. 

Not just in India, Cipla has been focussing on the OTC play in overseas markets as well. 

South Africa being a case in point. In Q3FY21, Cipla’s OTC segment in South Africa cloc­k­ed 6.4 per cent growth compared to the market growth of 3.3 per cent. The firm had not­ed in its FY20 annual report that one of every four patients in South Africa use Cipla’s OTC products (in categories where it is present). It even expanded its branded OTC business in that country through partnerships.