‘’DPCO 2013 will equally affect domestic as well multinational pharma companies’’

The DPCO 2013 aims to put in place a regulatory framework for pricing of drugs so as to ensure availability of ‘essential medicines’ at reasonable prices to end consumers. Based on their extensive databases, deep insights and knowledge of the pharma market, an expert team from IMS Health has deep dived into this issue and found:

Impact at company level

Companies Most Impacted By DPCO 2013
  MAT Value Value of NLEM Portfolio Contribution of NLEM Portfolio Revised Value of NLEM Portfolio Value Erosion Value Erosion % on Total TO
  Rs Cr Rs Cr % Rs Cr Rs Cr %
TOTAL MARKET 72762 13033 18% 11437 1597 2.2%
GLAXOSMITHKLINE 3021 837 28% 671 167 5.5%
ABBOTT 5122 1189 23% 1035 154 3.0%
RANBAXY 3015 753 25% 620 133 4.4%
PFIZER 2351 462 20% 344 118 5.0%
ZYDUS CADILA 2887 749 26% 652 96 3.3%
NOVARTIS INTL. 1223 373 31% 277 96 7.9%
CIPLA 3589 854 24% 762 92 2.6%
WIN MEDICARE 346 156 45% 92 65 18.7%
ALEMBIC 1215 297 24% 240 57 4.7%
SANOFI 2077 314 15% 263 51 2.4%
SUN 3174 363 11% 317 46 1.4%
WOCKHARDT 1252 237 19% 195 42 3.3%
DR REDDYS LABS 1504 296 20% 256 37 2.5%
Source: IMS Health, Total Sales Audit March 2013

  MAT Value Revised Value Post DPCO 2013 Implementation Value Erosion
Value Erosion Rs Cr Rs Cr Rs Cr %
TOTAL MARKET 72762 71166 1597
2.2
ACUTE 51807 50654 1153
2.2
CHRONIC 20955 20511 444
2.1
Source:IMS Health, Total Sales Audit March 2013

Both local companies and MNCs stand to lose almost equal quantum of sales on account of DPCO 2013 implementation. However as expected, MNCs will be hit relatively harder as compared to local companies on account of their premium priced portfolio. While at an overall level, local companies would lose ~1.6 per cent of their current revenue, MNCs are likely to see ~3.7 per cent erosion in their sales.

Impact at therapy level

Impact Of DPCO 2013 On Therapies
Impact Of DPCO 2013 On Therapies MAT Value Revised Value Post DPCO 2013 Implementation Value Erosion
Value Erosion
Rs Cr
Rs Cr
Rs Cr
%
Total Market 72762 71166 1597
2.2
Anti-infectives 11892 11420 472
4.0
Cardiac 8505 8246 259
3.0
Gastro Intestinal 7613 7476 137
1.8
Neuro / CNS 4322 4206 117
2.7
Dermatology 4012 3907 106
2.6
Gynaecology 4073 3985 89
2.2
Pain / Analgesics 5936 5855 81
1.4
Vaccines 1387 1309 78
5.6
Hormones 1285 1214 71
5.5
Anti Diabetic 5000 4942 59
1.2
Respiratory 5711 5680 31
0.5
Blood Related 771 743 28
3.7
Source: IMS Health, Total Sales Audit March 2013

Impact Of DPCO 2013 On Formulations Listed Under NLEM 2011
  MAT Value Revised Value Post DPCO 2013 Implementation Value Erosion
Value Erosion Rs Cr Rs Cr Rs Cr %
Total Market 72762 71166 1597 2.2%
Amoxicillin Trihydrate + Clavulinic Acid Potassium Salt Tablets 625mg 638 540 98 15.0%
Atorvastatin Tablets 10 mg 365 310 54 15.0%
Ciprofloxacin Hydrochloride Tablets 500 mg 231 179 52 22.0%
Omeprazole Capsules 20 mg 213 166 47 22.0%
Azithromycin Tablets 500mg 301 255 46 15.0%
Povidone Iodine Ointment 5% 106 66 40 38.0%
Premix Insulin 30:70 injection Injection 40IU/ml-SR/CR/XR 361 324 37 10.0%
Povidone Iodine Solution 5% 84 50 34 41.0%
Levothyroxine Tablets 50µg 82 51 31 37.0%
Hepatitis B Vaccine Injection 69 39 29 43.0%
Tetanus Toxoid Injection 79 50 28 36.0%
Folic Acid Tablets 5 mg 101 72 28 28%
Source: IMS Health, Total Sales Audit March 2013

The impact of DPCO 2013 implementation on acute and chronic therapies is almost identical. Both segments are likely to witness a drop in annual revenue of ~2.1 to 2.2 per cent. However, patients on chronic therapies who are currently using those packs listed under NLEM 2011 and which are currently above ceiling price, will benefit more in the long term.

Amit Backliwal, Managing Director, IMS Health — South Asia

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