Switzerland-based global healthcare firm Novartis’s Indian arm Novartis India (NIL) has signed an exclusive sales and distribution pact with Dr Reddy’s Laboratories for a few of its medicines, the company said in a regulatory filing on Friday.

Share Market Live

NSE

“NIL is entering into an exclusive sales and distribution agreement with Dr. Reddy's Laboratories Limited of its Established Medicines including Voveran range, the calcium range and Methergine, which is part of its Established Medicine Division ("EMO") and account for approximately 50% of its 2020-2021 product sales,” it said in the exchanges.

The arrangement, however, will lead to NIL firing around 400 employees due to role surplus and redundancies. Novartis India preliminary estimates approximately an amount of Rs 75 crore as outgo in the current financial year towards such costs and ex-gratia compensation under its Employee Separation Scheme ("ESS"), it said.

In addition to this compensation, NIL will extend outplacement services to impacted associates, the healthcare giant added.

Under the arrangement, Dr Reddy's will have exclusive rights to promote and distribute the well-established Voveran range, the Calcium range and Methergine in India.

The company will use its strengths in promotion and distribution to considerably expand its engagement with healthcare professionals with the aim of enabling access to patients in need.

"This arrangement will strengthen our portfolio in the pain management and women's health areas. It is our endeavour to build on the legacy created by NIL over the years and we intend to evaluate capabilities to maintain business continuity. This will help accelerate access and reach more patients," Dr Reddy's Laboratories CEO - Branded Markets (India and Emerging Markets) M V Ramana said in the statement.

Novartis India Country President and Managing Director Sanjay Murdeshwar noted that keeping the patient interest at the centre, the company has entered into the arrangement with Dr Reddy's Laboratories to extend access of the medicines to more patients in the country.

(With PTI inputs)

First Published:Feb 12, 2022 3:28 PM IST