Novartis India, a multinational company, suffered a setback during the first quarter ended June 2007 due to lower pharmaceutical and OTC sales. The net profit declined by 11.3 per cent to Rs 22.84 crore from Rs 25.74 crore in the corresponding period of last year. Its net sales also declined by one per cent to Rs 138.83 crore from Rs 140.28 crore. With fall in profits earning per share also came down to Rs 7.15 as against Rs 8.05 in the last period.
The company's pharmaceutical sales declined by 5.6 per cent to Rs 95.75 crore from Rs 101.40 crore and that of OTC products declined by 4.5 per cent to Rs 19.72 crore from Rs 20.64 crore. The sales of generics went up by 25.6 per cent to Rs 14.07 crore from Rs 11.21 crore.
While addressing the 58th annual general meeting of shareholders, R Shahani, vice-chairman & managing director, said, "Novartis net profit was under pressure during first quarter on account of price reduction of its third largest product Tegrital by 30 per cent. Pharmaceutical sales contributed 71 per cent of total sales. With the fall in prices, return on sales also worked out to 16.3 per cent as against 20.3 per cent in the last period."
Regarding shareholders queries about Glivec legal battle in the Madras High Court, Shahani pointed out that the petition goes to the root of the debate about intellectual property rights, patents, innovation and patient access to medicine. Denying patents and thereby stifling innovation, actually harms the interests of patients and future generations as it makes access to life-saving medicines like Glivec difficult. It effectively denies the crucial role that incremental innovation plays in research and development of new medicines.
He also expressed that the controlling price of drugs will create shortage and give way to rising of spurious and counterfeit drugs in the markets. The pharmaceutical industry is discussing with the government and top officials and expecting announcement of pragmatic policy. He suggested that the stringent punishment is required for the manufacturers and distributors of spurious and counterfeit drugs. He added that Uttar Pradesh and nearby region is facing this problem more than south.