Lupin has hiked the price of its anti diabetes drug in the US market by 200 percent. The move could increase its product revenue to around $ 100 million, say analysts. Lupin sells generic version of Fortamet (Metformin hydrochloride) and competes with Valeant’s Glumetza tablets in the US market.
Lupin’s price hike of its diabetes drug comes in the backdrop of the controversial 55- fold price hike carried out by Turing Pharmaceuticals for its Daraprim tablets which are used for treating parasitic infection. The price hike led to a public furore and renewed call for price caps in the US. Turing Pharmaceuticals was forced to announce a roll back in price hike. It had increased the price from $ 13.50 to $ 750 per pill.
Unlike India, the US is a free market for pharmaceutical pricing and there is no restriction or cap on prices of either generic products or new and innovative medicines. However last October, US Congress had initiated an inquiry against fourteen companies including three Indian companies Sun Pharmaceuticals, Dr Reddy’s and Cadila Healthcare for abnormal price hikes.
Lupin did not respond to an email query. However industry analysts said Lupin’s diabetes drug is still priced lower than Valeant’s drug which has recently seen 500 percent rise in its price.
“Lupin’s price hike has come after a huge price increase in competing product Glumetza. After the hike, Fortamet is still 75% cheaper than Glumetza,” said Sarabjit Kour Nangra (VP-Research, Angel Broking) in a note to investors. Nangra estimates Lupin’s sales from the product at around $ 43 million and with the hike, the product should earn a total of $ 70-80 million.
Surajit Pal, analyst with brokerage Prabhudas Lilladher estimates that price hike could double the sales of this diabetes drug to $ 100 million.
Lupin has been selling the generic version of Fortamet in the US market since 2011. Japanese drug maker Shionogi had secured an injunction against the sale but Lupin resumed its sale in April 2012 after an appeal court stayed the injunction order.
Lupin has also secured the right to sell the generic version of Glumetza too from February 2016 following a settlement with Santarus Inc in 2012. The diabetes drug was sold by Santarus to Salix Pharmaceuticals in 2013. Salix itself was acquired by Valeant Pharmaceuticals earlier this year.
September 24, 2015