Industry sources said that the Ranbaxy-Cipla arrangement will cover "select" products in the area of antibiotics and cardiac therapy, though brand specific details could not be ascertained. No official confirmation was, however, available from both potential partners.

Glaxo's official spokesperson did not want to comment on the proposed alliance. The British healthcare giant already has a string of licensing arrangements in place--with SmithKline Beecham for T-bact, Zeneca for Zoladex.

If the Cipla-Ranbaxy arrangement fructifies, it could possibly be Mumbai-based pharmaceutical company's first major strategic marketing arrangement in India, though Ranbaxy already hasmarketing links with German multinational Hoechst Marion Roussel.

Ranbaxy and Hoechst Marion Roussel recently extended their co-marketing arrangement to cover the multinational's global anti-histamine brand, Allegra (fexofinadine hydrochloride) in India. Ranbaxy's fexofinadine drug has been branded, All Day, and the combined field strength involved in marketing the molecule is estimated at 600. The two partners were already jointly marketing formulations of ofloxacin under brand names of Tarivid in the case of Hoechst and Zanocin for Ranbaxy.

Analysts said that co-marketing efforts are usually aimed at increasing the "noise levels" in the market and would facilitate the growth of both partners' brands. "Any co-marketing move will see increased awareness among medical practitioners and possibly rapid acceptance of the new drug too. Very often, in an arrangement between a multinational and a domestic firm, the former usually gets dual benefits.

Besides facilitating an improvement in brand rankings andmarket shares, the Indian firm sometimes also sources the basic ingredient from the international partner," another analyst said.

Cipla cuts anti-AIDS formulation price

The Rs 541-crore Cipla has undertaken another voluntary price reduction. The company has slashed prices of another anti-AIDS formulation, Lamivir (lamivudine) from Rs 50 per tablet to Rs 38. The drug was launched in August 1998. Top company officials said that the reduction was possible due to improvements in the process technology using chiral synthesis. Officials, however, pointed out that while local manufacture of the lamivudine formulation attracts an excise duty of 15 per cent, and the intermediate another 43 per cent, lamivudine imports are virtually duty free. "Absence of such heavy duties on domestic manufacture would have made the lamivudine formulation cheaper by atleast Rs 6," they added.

INSIGHT

A win-win situation

A co-marketing agreement between the two pharma giants Ranbaxy and Cipla is a win-winsituation for both the companies. The most important point is that there will be one main competitor less in the market to tackle. Plus the firms can utilise each other's marketing network and selling cost will be substantially reduced. Marketing costs constitute one of the main expenses worldwide for pharma companies- in some cases it is higher than R&D costs. By entering into co-marketing pacts, substantial savings in these costs are achieved, which would mean that the trend would be towards increased use of such pacts.