Consumers may have to pay more for insulin

Popular domestic brands of insulin analog Glargine (the chemical name) are in short supply for the past few months, forcing patients to switch to expensive imported alternatives, it is learnt. According to sources, Wockhardt, which sells the product under its brand Glaritus, could not manufacture the insulin for at least six months following bulk drug supply disruptions from China.

A detailed email questionnaire sent to Wockhardt on Tuesday did not elicit any response.

Apart from Wockhardt, only Biocon manufactures insulin analog indigenously. Biocon maintained its product is available with over 1,000 stockists across the country. However, a number of  stockists, Business Standard checked with, said they did not have any domestic brand of insulin analog.

“There is no shortage of the product, all requests for products from the stockists are being met on a regular basis,” said Shukrit Chimote, head of branded formulations in India, Biocon, adding the company was not dependent on imports.

Glargine, used in the treatment of diabetes, is an altered form of insulin that stays in the blood stream longer than other forms of insulin. According to IMS Health estimates, the total insulin market in India is estimated to be around Rs 1,467 crore. Out of this, the insulin analog market is estimated at about Rs 1,416 crore, rest is mainly insulin devices.

Among imported insulin analog, Sanofi’s Lantus is one of the premium brands. The other leading multinational pharmaceutical companies selling imported insulin brands include Eli Lilly and Novo Nordisk.

Even as all insulin products are under price control, there was still a huge price difference between domestic and imported brands, official sources said. This is because prices of insulin were capped just before the new pricing policy came in place. Hence, insulin prices would be revised again to align with the new policy after a year, an official at National Pharmaceutical Pricing Authority said. The pricing authority had notified two separate ceilings for domestic and imported insulin packs respectively in November last year. The move was aimed at eliminating the significant price gap between domestic and imported brands of insulin.

According to officials, while the price of domestic insulin ranges between Rs 130 and Rs 500 depending on pack sizes, imported ones are priced much higher around Rs 540 to Rs 2,500.

Experts suggest domestic companies might be facing the challenge while entering the insulin market because of price disparity and pressure.  “Cost of manufacturing, distributing, and storing (inventory) insulin is high; the cost of distribution and inventory (D&I) itself can be twice the cost of standard industry D&I cost,” says Jasdeep Singh, engagement manager, IMS Consulting.

“Therefore, a company needs sustained investment for multiple years to capture market share and break-even. Any negative deviation from the plan in garnering market share leads to scaling down investments, causing a vicious cycle of muted growth. Further, economies of scale can’t be realised until a company reaches a threshold market share.”

On Thursday, shares of Wockhardt ended at Rs 444.15 on the Bombay Stock Exchange, down 0.75% from their previous close. Biocon shares ended at Rs 431.25, down 0.44%.