Coronavirus impact: Top pharma companies fare better during lockdown

New launches stagnate as fresh prescriptions dry up

Kolkata-based Sutapa Sengupta (name changed) was experiencing pain in her lower back and limbs. Unable to reach out to her doctor because of the lockdown, she opted for a drug she thought was safe and a brand she was familiar with — Calpol.

The medicine, made by British multinational pharma major GlaxoSmithKline Pharmaceuticals (GSK), has seen a major jump in terms of monthly sales in March. According to data from market research firm AIOCD AWACS, Calpol saw sales of Rs 17.9 crore in December, when it was the number 3 drug in the category. However, its sales shot up to Rs 24.8 crore in March, making it number one in the category.

As such, top brands continue to do well despite the lockdown, when prescription generation has almost come to a standstill. In a recent report, CLSA said that for March the average growth of the top 10 brands was 15 per cent, much higher than 9 per cent growth seen by brands ranked 11 to 20, and 6.3 per cent growth seen by brands ranked 21 to 30.

CLSA noted that the top brands continue to be the key drivers of growth for companies — top brands clocked growth in the range of 5-21 per cent year-on-year in March.  A GSK spokesperson said the company’s strategy to focus on its top brands is auguring well in these times. The company is also conducting webinars with clinicians on several topics relevant to the Covid-19 pandemic.

In fact, webinars have become the order of the day, with the pharma sales force taken off the field. Mumbai-based JB Chemicals and Pharmaceuticals, which owns marquee brands like Metrogyl and Rantac, launched a cardiac (hypertension) product in March through a webinar right before the lockdown began. “We first trained our medical representatives (MRs) through webinars. Then we launched the product through webinars with doctors. This was right before the lockdown. However, making it available at the retail level has been a challenge,” said Pranabh Mody, president, JB Chemicals.

Drug firms depend on fresh prescriptions for their new introductions, which are made available at medical stores near the clinics visited by MRs. The lockdown has made supplying drugs to the right retail outlets a challenge. “Moreover, why would a chemist even stock a new brand when he knows fresh prescriptions will be rare,” said a senior official at a drug firm.
 

As a result, new launches have fallen sharply. From 278 new product launches in February, the number slipped to 123 in March, and drug makers said April would hardly see any new launches.

Pharma majors said the sales outlook for April is even grimmer. “For the anti-infectives segment (antibiotics primarily), the sales in the first 15 days of April are down by 67 per cent compared to the first 15 days of March,” said the senior official of a Mumbai-based drug major.

He reasoned that demand for antibiotics, and even gastrointestinal medicines etc. is slowing down, with people staying indoors, eating home-cooked food and taking care of their health.
 

“The industry expects the value growth this year to slow down to 1.5-3 per cent if the crisis continues. Apart from new launches and smaller brands getting hit, logistics challenges will also affect overall sales,” said CEO of a drug major on condition of anonymity.