Mumbai-based pharma company Lupin says any kind of price control will be a deterrent for the industry and 30 percent of its portfolio will be impacted if government implements price control measures.
A group of ministers will meet on Wednesday to resolve the deadlock on the national pharma pricing policy. The GoM had earlier recommended market-based pricing for essential drugs and the government should control 30 percent of the market. The Finance Ministry in turn has recommended a cost-based pricing policy.
Meanwhile, Lupin expects to get a "pretty good" market share in the Fenofibrate anti-cholesterol drug Tricor (marketed by Abbott) segment, following the launch of its generic version on Tuesday.
The company's subsidiary Lupin Pharmaceuticals has launched Fenofibrate Tablets in 48mg and 145mg strengths in the US market.
Abbott's Tricor had sales of USD 1.26 billion, it said, citing IMS Health data for June.
Lupin also doesn't expect any significant threat to the already existing product Antara, which is also one of the fenofibrates.
The company had acquired the US rights for Antara (Fenofibrate capsules in 43mg and 130mg strength) in September 2009. It was earlier marketed by Oscient Pharmaceuticals.
Below is the edited transcript of the interview given to CNBC-TV18 by Ramesh- President- Finance & Planning, Lupin.
Q: What is your expectation in terms of monthly revenues from Tricor given the level of competition that you are working with and the kind of price erosion that you are likely to see?
A: Tricor is a 120 crore opportunity which is pretty large by generic standards. Given the fact that it is actually a three player market, today we have Teva, Lupin and potentially Valiant also. It is obviously going to be a limited competition market. So the price erosion is not going to be pretty high. Looking at our past track record of actually getting about 30-35 percent market share in anything that we get into, we would obviously expect us to get a pretty good market share in this particular molecule as well. So, we have pretty high expectations from Tricor.
Q: The fear though, is that Tricor may eat into your already existing product Antara. How will it balance out between the two in terms of what the potential revenues could be from your US business?
A: Yes, Antara is also one of those fenofibrates that exist in the market. However, there are differences between Tricor and Antara. For one, Tricor is much larger in terms of the size of the capsule itself, but if you look at Antara, it is much smaller. So there is actually an audience which actually looks around for this kind of product, principally because it is easier for them to take it for ingestion itself. The bioavailability in the system itself is pretty much the same for both Antara as well as Tricor. We also find that there is actually a market for products that are below the radar and which are promoted. We continue to promote the product in terms of sales force calling on doctors etc. So we do not believe that the launch of Tricor will have an impact on Antara.
Q: There have been some concerns of late because of the way the yen has depreciated. Do you see any substantial impact on your earnings because of that? Or will it be mitigated by how other currencies are moving?
A: We are always impacted by movements of various currencies; the euro, the dollar and the yen. About 15 percent of our revenues are actually from Japan itself and if there is an adverse movement of the yen, it does impact our financials. However, we believe that this is something which is always a two-way movement. So, we reckon that this will get sorted out in the long-term.
Q: A Group of Ministers (GoM) will be meeting on the pharma pricing policy today. How many of Lupin’s products could be impacted by what that policy decides? What is your expectation of what the outcome maybe, especially with regards to pricing?
A: We always held that any kind of price control is always a deterrent to this industry. It is quite a dampener. Sometime ago, there was this talk about the fact that it would actually be the market based pricing again and a lot of other various pricing ways.
There is also the Finance Ministry which is advocating the cost based pricing. We believe that any kind of control is going to be bad for the industry. We are hoping that it would actually be market based pricing rather than cost based because that would actually be a big dampener. We believe that our overall portfolio, close to about 30 percent would be impacted by any such price control.