You are here: Home » Companies » Industry
Business Standard

Puzzle in Wednesday order on duty exemption

One of the 3 reversals on removal of customs concession is for a drug whose Sun Pharma generic is market leader

Deepak Patel  |  New Delhi 

Half of online drug orders end up getting cancelled

To boost imports and avoid further public pressure, the government on Wednesday restored exemptions on three life-saving drugs. However, it is not clear why the government selected Octreotide as one of the three, where India’s leading drug maker, Sun Pharmaceutical Industries, has a leading market share.

According to the latest data of IMS Health, a global information and technology services company, Sun, which makes this drug at its Halol (Gujarat) unit and sells it under the brand name of Octride, has a market share of 63 per cent. However, according to AIOCD AWACS, a market research entity formed by the All Indian Origin Chemists & Distributors, the company’s generic has a market share of 78 per cent. Sun declined to comment on queries from Business Standard.

“It is difficult to know why the government has restored the exemption on this drug. It is possible that someone has made a presentation with the government that multinational which are importing these drugs should be given exemptions, as they have a better distribution system and, therefore, can make this life-saving drug available all over India,” said M S Mani, senior director, Deloitte in India.

Puzzle in Wednesday order on duty exemption
On February 5, the government had removed the exemptions on 76 life-saving drugs, saying Indian generic manufacturers were quite capable of making these and, subsequently, there would be no price increase.

Wockhardt and Samarth Pharma have a market share of six per cent and four per cent on sales for the Octreotide molecule respectively. Novartis produces three variants of this and has a cumulative market share of 12 per cent, says the latest data. A total of 12 are selling Octreotide in India.

“Not just focusing on the domestic production, the government might have taken this step of customs duty relief so that more multinational are into this market,” said Sarabjit Kour Nangra, vice-president at Angel Broking.

Octreotide is used to treat hormonal disorder, besides symptoms of severe diarrhoea and flushing caused by cancer.

The other two drugs where exemptions were restored on Wednesday are Somatropin and Anti-Haemophilic Factor Concentrate (VIII and IX). The former is used to treat growth failure in children and adults who lack a natural growth hormone. And, for chronic kidney failure.

The government faced much pressure from those with haemophilia (where the blood doesn't clot easily), as they feared a price hike in the Factor Concentrate injections. IMS Health data says only three companies sell Factor VIII in India – Baxter, Reliance Life Science and Intas Pharma. Baxter has market share of 81 per cent.

The Somatropin market here is also dominated by foreign companies – LG Life Sciences , Eli Lilly, Pharmacia (Pfizer) and Ferring Pharma, with a market share of 38 per cent , 26 per cent, 20 per cent and one per cent, respectively. Ranbaxy, the only Indian generic drug maker which sells Somatropin, under the brand name of Headon, has 16 per cent.

First Published: Fri, February 19 2016. 00:44 IST
RECOMMENDED FOR YOU