Indian pharma firms boost Wal-Mart revenues

Ranbaxy, Cipla and other Indian drug makers are helping US retailer Wal-Mart sell drugs at low cost and boost revenue.

Indian companies say the low-cost medicine revolution kicked off by Wal-Mart covers medicines meant for cholesterol and heart problems, diabetes, antibiotics, fungal infections, among others.

Wal-Mart's $4 Prescription Program, which covers up to 95 per cent of the prescriptions generated in majority of therapeutic categories in the US, provides its customers over 350 prescription medicines for just $4 (Rs 172) for a month's dose.

Last month, Wal-Mart announced an extended Prescription Program, wherein the company offered 90-day prescriptions for $10 (Rs 430). The company says through such programmes, the US consumer has saved over $1 billion.

Wal-Mart did not respond to an email query seeking details of its Indian suppliers.

Meanwhile, for Indian companies that have been waging a price war in the US generic business, supplies to pharmacy chains like Wal-Mart have turned more like their much-famed HIV/AIDS medicine supplies to developing countries in Africa and Latin America.

Indian off-patent medicine manufacturers like Ranbaxy, Dr Reddy's and Sun Pharma, Glenmark are all among the list of suppliers to US pharmacy chains, including Wal-Mart Stores, it is learnt.

According to the Pharmaceutical Export Promotion Council, while the volume of medicine exports to the US is increasing, the realisation is on the decline.

"The generic drug prices in the US market have substantially gone down with Indian generic players quoting low prices. This has led to a top departmental store offering to supply of medicines for cardio-vascular ailments, diabetes and antibiotics for $4 for one whole month. It is good to see that the quality of Indian generic products are accepted in the US," P V Appaji, executive director, Pharmexcil, said.

The ability of Indian companies to penetrate into the global generic space and the decision of governments, even in developed countries, to prefer generics to branded products is among the major attractions that make Indian companies potential targets of the Ranbaxy-Daiichi model acquisitions, industry experts said.