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Dr Reddy lab to sell drugs to US retailers

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India’s leading drug manufacturer, Dr Reddy’s Laboratories (DRL), has chalked out an ambitious expansion plan in the United States of America where after its successful tieup with top retail chain Wal-Mart now plans to partner at least half a dozen American retail chains.

The Hyderabad-based drug maker hopes to enhance its share in the over-the-counter (OTC) market. The plan is to launch around 8-10 drugs in the US over the next 12-18 months.

“We plan to launch about 8-10 prescription drugs that have the potential to become over-the-counter drugs, with regulations easing out. As prescription drugs, these have a market potential of $17 billion,” said the president of DRL North American (generics) Mark T Hartman.

Under the private label sales, Dr Reddy’s products are branded as the products of retail chains and sold in their supermarkets. Walmart is already selling Dr Reddy’s Laboratories’ Ranitidine 150 mg and 75 mg under its brand name ‘Equate’. The company has exclusive marketing rights for the drug and is also selling it through other players such as CVS, Target among others.

Some of the other private store chains looking at this model include CVS and Sam’s Club. Both the retail chains had a turnover of over $40 billion in the last fiscal. If DRL ties up with a store like CVS that has over 6,200 pharma retail chains in the US, it can get access to a huge market of over-the-counter drugs, a senior industry analyst said. A tie-up with US retail chains could also help lower marketing costs for companies like DRL.

The drugs planned for launch include Naproxen sodium 220 mg, Famotidine pepsin 10 and 20 mg and pentaprazole. The company forayed into the over-the-counter drug segment in the first half of 2007 this year on its own. The move came from the firm after it snapped its 15-year exclusive OTC product development and marketing pact with US food supplement major Leiner Health Products.

“The success of simvastatin and ondanseteron has reinforced faith in our customers on the B2B end. This has worked to our advantage in entering into more relationships for over-the-counter and prescription drugs,” Mr Hartmann said.

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