Novartis India Ltd. (NIL) has entered into an exclusive sales and distribution agreement with Dr. Reddy’s Laboratories for a few of its established medicines, which includes the Voveran range, the Calcium range, and Methergine.
The move to bring together the manufacturing and development synergies of NIL with the sales and distribution strengths of Dr. Reddy’s will result in about 400 Novartis employees losing their jobs.
“This strategic business decision is leading to the separation of approximately 400 employees of Novartis India Ltd. due to role redundancies. We understand the implications of this difficult decision on those impacted and their loved ones and we are extending a severance package along with outplacement services,” Novartis said in a release.
The sales and distribution agreement, with Dr. Reddy’s, aims to further broaden access of these medicines beyond the current geographies to benefit many more patients, more efficiently, by significantly extending the reach of healthcare professionals through an expanded field force, the firm said.
Separately, Dr. Reddy’s said it will be using its strengths in promotion and distribution to considerably expand the 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,” CEO-Branded Markets (India and Emerging Markets) of Dr.Reddy’s M.V. Ramana said.
With India business as a key growth driver, the arrangement will strengthen company’s presence in key therapy areas, Dr. Reddy’s said.
Novartis said barring unforeseen circumstances, the agreement has the potential to drive value for shareholders of NIL. Novartis AG will retain trademark ownership of these medicines.
Country President and MD of Novartis in India Sanjay Murdeshwar said, “on one hand, we have entered this strategic business arrangement with Dr. Reddy’s to extend access to our established medicines to benefit more patients in India efficiently. On the other, we understand the implication on the roles of our colleagues in Novartis India Ltd. and are doing our best to support them.”
