The only way to bring down medicine prices is through competition, said Cipla Chairman Y.K. Hamied, addressing shareholders at the company’s annual general meeting.
Referring to the Government’s recent price-control policy, he said only products that are a monopoly and have one or two players should be brought under price control. Products made by several companies should be left alone, as competition will bring prices down, he said.
“It is for India to decide for itself,” he added.
The Government’s recent pricing policy expanded the scope of price control to 348 drugs (about 650 formulations) on the list of essential medicines.
This would impact Cipla’s domestic revenues by about two per cent, Hamied said, adding that it would be made up by increased volumes and sale of non-price controlled products.
Rupee lows
Commenting on the rupee breaching the 65 mark against the dollar, Hamied said: “We do not play the rupee-dollar market.”
Subhanu Saxena, Cipla Managing Director and global Chief Executive, added that there was no need for the company to manage its exposure to the dollar.
While 55 per cent of the company’s sales are exports and not rupee-based, import costs are dollar-denominated, as they are for several other companies, and that makes import prices volatile, he said.
It is difficult for companies to operate against this back-drop, Saxena noted, even as their products were being put under price controls in the domestic market.
Bio-similars
Hamied said that the company was transforming from a “papa-mama” or family-run company to a professionally-run company with a greater international footprint. It was targeting $5 billion in revenues by 2020, he said. The over Rs 8,000-crore company had clocked profits of Rs 1,500 crore last year.
The Chairman said the company was making bio-similars at its Goa factory. Cipla has a Chinese biotech partner, said Hamied, adding that they had plans to make bio-similar versions of Roche’s cancer drugs Herceptin and Avastin.
Breast cancer drug Herceptin was recently in the news, when Roche said that it would not pursue its patent on the drug.
A bio-similar is similar to a biological product (that usually contains live organisms) and making these products is extremely difficult.
With Herceptin off patent protection, it means local drug companies can make the drug and the competition may bring its prices down.
But bio-similars are not an easy arena, said Saxena, adding that industry watchers should not expect a “big-bang” announcement soon.
Nevertheless, he added, the company was lining up a robust pipeline with its Chinese partner.
jyothi.datta@thehindu.co.in