Ranbaxy OTC drug segment likely to Benefit Sun Pharma, Post Acquisition

New Delhi:Sun Pharma, the country’s largest drug maker is working on ways to gain from over the counter business of Ranbaxy laboratories, a company it acquired two years ago. It is attempting this to gain an international presence.

Before the Ranbaxy acquisition Sun Pharma was inconsequential in the high volume OTC segment.Its recently manufactured OTC drug ‘pepmelt' antacid brings the company onto the shelves of other competing OTC antacid drugs like Eno, Digene and Pudin Hara.

“Our consumer healthcare, or OTC business is a result of acquisition of Ranbaxy. It is a high-margin, high-growth business. We want to use this as a base to create a global OTC business,” Dilip Shanghvi, Managing Director, Sun Pharma told HT. “So, we are actually giving lot of internal focus and importance to it.” he added.

According to HT when Sun Pharma acquired Ranbaxy, consumer healthcare was the latter’s fastest-growing businesses, with leading brands such as Revital, Volini, Chericof, Pepfiz and Garlic Pearls. Ranbaxy has 15 OTC products, which contributed over 20% of Ranbaxy’s sales, before acquisition.

“The two top-growing segments in OTC are health supplements and analgesics and we are witnessing a growth that is healthier than the growth rate of the entire OTC market,” said Subodh Marwah, Vice-president — consumer healthcare business, Sun Pharma. “So we are actually giving lot of internal focus and importance on growing that part of the business.” he said.

“Consumer health business is important for our future growth not only in India but in other markets where we have presence, where our idea is to grow the business and look at potential inorganic opportunities,” added Shanghvi .

OTC medicines contribute 10% to 15% to Sun Pharma’s revenues according to market analysts. Brands such Revital (health supplement) and Volini (analgesic) feature among top 10 brands of the country. Significant investment is likely to be made by Sun Pharma in these categories.

The antacids category is currently pegged at over Rs 1,180 crore, growing at around 21% every year as per Neilsen estimates . Pegged at around Rs 5,300 crore, the total OTC market in India is growing annually at around 12% to 13%.