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Price
control on natural Vitamin E to help E Merck
Kailash
Rajwadkar
Mumbai, Jan 6: E Merck India is expecting to reap the
benefits in turnover from its ‘synthetic’ vitamin E, following
the National Pharmaceutical Pricing Authority’s (NPPA) decision
to bring the ‘natural’ vitamin E formulation under price control.
NPPA’s decision to levy a ceiling on the formulation comes
even as its bulk drug continues to be outside the purview
of price control.
As a result of the NPPA decision, producers
of natural vitamin E are likely to find it unfeasible to produce
and market natural vitamin E formulations as its processing
is two to three times more expensive when compared with the
processing of synthetic vitamin E, coupled with lower yields,
E Merck India, director, RL Shenoy, said.
Though no concrete data is available, industry sources indicated
that natural vitamin E would constitute around 20 per cent
of the total demand.
Subsequent to the price revision, prices of natural vitamin
E capsules now work out to Rs 7.38 for a strip of 10 capsules,
as against E Merck India’s Rs 6.44 for 10 capsules. Currently,
the company derives a turnover of around Rs 30 crore per annum
from synthetic vitamin E formulation and also enjoys satisfactory
margins, Mr Shenoy said.
However, analysts state that though the company is the sole
manufacturer in the country, it faces stiff competition from
cheaper Chinese imports. The consumption of vitamin E in India
is also less when compared with China and other developed
countries, analysts said.
E Merck India — the only producer of the synthetic vitamin
E both bulk and formulation in the country — has a capacity
to produce 350 tonnes of synthetic vitamin E which is used
for captive consumption for producing formulations. Its Evion
brand (vitamin E) accounts for a 40-per cent market share,
according to the analysts.
Meanwhile, the royalty payment from E Merck India to its parent
would work out to around Rs 2.5 crore per annum.
This was after the company received an approval from the Foreign
Investment Promotion Board (FIPB) for royalty payment to its
parent.
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