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