Novartis India Ltd (NIL), with Dr. Reddy’s Laboratories has entered into an exclusive sales and distribution agreement for some of its established medicines including the Voveran range, the Calcium range and Methergine.
The move to combine NIL’s manufacturing and development synergies with the sales and distribution strengths of Dr. Merging Reddy’s will result in around 400 Novartis employees losing their jobs.
“This strategic business decision will result in the separation of around 400 employees from Novartis India Ltd due to downsizing. We understand the impact of this difficult decision on those affected and their families and are expanding a severance package along with outplacement services,” Novartis said in a press release.
The sales and distribution agreement with Dr. Reddy’s aims to expand access to these drugs beyond current regions to serve many more patients more efficiently by significantly expanding the reach of healthcare professionals through an expanded field force, it said.
Regardless, said Dr. Reddy’s that it will leverage its strengths in advertising and distribution to significantly expand collaborations with healthcare professionals to provide access to patients in need. “This agreement will strengthen our portfolio in the areas of pain management and women’s health. It is our endeavor to build on the legacy NIL has created over the years and we intend to evaluate the capabilities to maintain business continuity,” said CEO-Branded Markets (India and Emerging Markets) of Dr.Reddy’s MV Ramana.
As the business in India is a key growth driver, the agreement will strengthen the company’s presence in key therapeutic areas, said Dr. Reddy’s.
Novartis said barring unforeseen circumstances, the agreement has the potential to increase value for NIL’s shareholders. Novartis AG retains brand ownership of these drugs.
Novartis Country President and MD in India, Sanjay Murdeshwar said, “On the one hand, we are entering into this strategic business agreement with Dr. Reddy’s to expand access to our established medicines to efficiently benefit more patients in India. On the other hand, we understand the impact on the roles of our colleagues at Novartis India Ltd and do our best to support them.”
