drug makers: Indian companies eye new trade channels in US amid erosion of generic prices

Indian drug makers scuffling with commerce channel consolidation and fast erosion of generic medication costs within the US, are exploring platforms comparable to Amazon, American billionaire Mark Cuban’s CostPlus Drug Firm and different specialty and white-label e-pharmacies to promote generic medicines.

Whereas these platforms are nascent and have restricted scale in the mean time, as they principally promote out-of-pocket over-the-counter (OTC) medicines and a restricted portfolio of pharmaceuticals, executives at Indian firms see them as potential alternate options to closely concentrated commerce channel the place three large shopping for consortiums, AmerisourceBergen, Cardinal Well being, and McKesson Company, account for over 90% of the market, and have assumed higher bargaining energy over suppliers to drive down costs and extract heft reductions on medication.

“Increasingly channels will assist and we’ll work with anybody that is going to purchase our merchandise,” stated Erez Israeli, CEO of Dr Reddy’s to ET.

Dr Reddy’s has begun tapping a few of these platforms. Whereas the corporate calls Amazon as its main associate, it is usually working with different e-commerce platforms comparable to Thirty Madison, Click on Therapeutics, Truepill to promote over-the-counter (OTC) medicines. Presently gross sales by e-commerce constitutes about 10% of its OTC enterprise, however it’s rising quick. In Q1, this channel grew within the vary of 40-50%. Dr Reddy’s OTC gross sales was $150 million in FY22. It additionally began transport about 10 prescription generics (Rx) merchandise to Mark Cuban’s CostPlus Drug Firm.

Launched in January, CostPlus Drug Firm is a web based D2C (direct-to-consumer) platform that sells about over 100 generic pharmaceuticals at price plus a hard and fast 15% margin and $3 cost for labor. Cuban’s determination to get into pharmacy is to carry transparency and decrease costs of generic medication, a serious concern within the US.

One other drug maker

stated there have been talks with these platforms. “I do not assume the mechanics of whether or not this may end in elevated worth erosion or much less worth erosion will come up, however these are choices to the prevailing channel. which most likely is ultimately is extra diversification of the channel, as towards the focus that we have seen prior to now couple of years,” stated Umang Vohra. MD & World CEO.

Pranav Amin, MD of

echoes the identical. “Traditionally there have been 8 large consumers after which about 10-15 small consumers, everybody had sufficient share to get into, proper now the shopping for teams are consolidated, the extra consumers come it’s higher for the pharmaceutical trade,” Amin stated.