In an interview with The Financial Express on the evolving Indian generics sector, Davies said that the regulatory requirements are the same for both branded formulations and generics, dispelling the myth that the latter is unsafe.

"Substitution of branded drugs with less expensive generics or a form of that is a practice prevalent even in developed markets. But this in no way implies that generics are less safe. In the UK, almost 70 per cent of the doctors tend to prescribe generic drugs and we have over 30 drugs selling a single drug like atenolol," he said.

Davies also explained that the production costs involved in both generics and branded versions are near identical, though the marketing costs incurred on the former are far lower given that the pharmacist pushes generic drugs.

Says Davies, "In Okasa, we do not employ any field personnel to promote our products and the drugs are essentially promoted by the trade. For this, the trade obviously has to be compensated. In any case for a new company like Okasa, marketing costs could be as high as 35 per cent of sales," he explained.

"In reality, due to intense competition among the chemists, generic products are sold to patients at prices lower than the MRP, whereas this is not true in the case of the branded drug. I am told that there are a chain of pharmacies in Tamil Nadu and Kerala etc, which are passing on discounts to the customer in the case of generic products," he added.

Davies, said that his company plans to plans to launch at least 10 products in the near future and is looking at a turnover of around Rs 40 crore in the first year of launch. "We are very much on target and are ready with 30 new products including sparfloxacin (an antibacterial), fluconazole (an anti-fungal) and multi-vitamins," he said.

New products proposed to be manufactured by Okasa under the alliance include enalapril (for hypertension), medicated adhesives and nimesulide (for post-operative trauma, osteoarthritis) and calcium carbonate (branded Okal).

Neolab is the third Davies-promoted company, after the 55-year old chairman had in 1989 sold APS Ltd to Rhone Poulenc and Lagap in 1995. Neolab is expected to notch sales of around pound sterling 30 million by 2002 and pound sterling 50 million three years later.