This Pharma Company Will Fire 400 Indians; Stops Sales, Distribution For Some Of Their Products

Global pharma Novartis’ Indian arm Novartis India (NIL) has entered into an exclusive sales and distribution agreement with Dr Reddy’s Laboratories for a few of its established medicines.

Medicines Under The Agreement

NIL said that the medicines will be transferred to the Hyderabad-headquartered Dr Reddy’s Laboratories on an exclusive basis for sales and distribution.

They include the Voveran range, the Calcium range and Methergine.

These medicines are part of NIL’s Established Medicine Division (“EMO”) and account for approximately 50% of its 2020-2021 product sales.

Novartis AG will retain Trademark ownership of these medicines.

Purpose Of The Pact

The arrangement aims to broaden access to these medicines beyond the current geographies so it could benefit more patients through an expanded field force.

Novartis said that the pact combines the manufacturing and development synergies of NIL with the sales and distribution strengths of Dr Reddy’s.

Its country president and managing director Sanjay Murdeshwar said that the strategic business arrangement was inked keeping the patient interest at the centre and to extend access of the medicines to more patients in the country.

Firing 400 People

This strategic business decision will result in laying off of approximately 400 employees of NIL due to role surplus and redundancies.

Novartis will extend a severance package along with outplacement services.

It estimates an expenditure of Rs 75 crore in the current financial year towards such costs and ex-gratia compensation under its Employee Separation Scheme.

Hiring Continues Regardless

It had hired over 1,600 employees across divisions and companies in India since January 2020.

It plans to continue its hiring program in 2022, adding to its Indian workforce of over 10,000 full-time employees.

Novartis had spent over $300 million over the last five years to create an R&D support centre and services in the country.

It will be expanding further by setting up an additional manufacturing plant at Kalwe which would manufacture oral cancer medicines for the global market at an investment of approximately $49 million.

Areas Of Focus

Dr Reddy’s Laboratories said that the pact will strengthen its portfolio in the pain management and women’s health areas.

Voveran is a pain-relieving medicine and Methergine is used in women’s healthcare.

The company will endeavour to build on NIL’s legacy and will “evaluate capabilities to maintain business continuity. This will help accelerate access and reach more patients”, said Dr Reddy’s Laboratories CEO – Branded Markets (India and Emerging Markets) M V Ramana.