Micro Labs denies allegations, ₹1,000 crore is total expenditure over the years

Advertisement

Micro Labs has denied allegations that it gave doctors freebies worth Rs 1,000 crore to promote its anti-inflammatory drug Dolo 650. An NGO informed the Supreme Court on Thursday that the Central Board of Direct Taxes has accused the Bengaluru-based drug firm of distributing Rs 1,000 crore in freebies to doctors in exchange for prescribing its 650 mg tablets.

It told CNBC-TV18 on Monday that the data was gathered over many years across their 14 divisions and 6,000-strong field force. The only freebies distributed by the company were those permitted, such as books, pens, and small mementos, according to the company, which also stated that it is currently cooperating with all investigations.

A Micro Labs spokesperson stated in a statement that some recent media reports falsely and maliciously claimed that the company distributed freebies worth Rs 1,000 crore to promote Dolo 650 in one year. “This is highly misleading and harms the reputation of Micro Labs, the pharmaceutical industry, and doctors.”

Dolo 650, a paracetamol drug, is a fever and pain-relieving medicine that rose to prominence during COVID-19 and is quickly becoming the ‘go-to’ pain-relieving medication in many cases.

This drug’s annual sales were Rs 360 crores, accounting for about 8% of the company’s total sales. Despite raw material costs tripling during COVID, Micro Labs maintained uninterrupted supplies at the government-mandated retail price of less than Rs 2 per tablet, said the spokesperson.

During the COVID-19 period, the Dolo brand, led by the 650 doses, grew to enjoy a 22% share of the total Rs 3,100 crore worth of paracetamol-based drugs sold, which means that 22 out of 100 people chose to buy Dolo among all paracetamol drugs.

In terms of sales for Dolo, despite being subject to price controls or inclusion on the National List of Essential Medicines, the 650 mg dose generated more than Rs 300 crore between March 2021 and February 2022. In some cases, sales were more than 10 to 30 times higher than for comparable drugs.

The Dolo 650 mg brand, which premiered in 1993, was one of the market’s early adopters, with an 80% to 90% market share in the 650 mg category at one point.
Eventually, the market share settled around 50%, rising to 58% during COVID-19.

Surprisingly, the Dolo brand only sees this type of stickiness for the 650 mg strength, despite selling other strengths such as 500 mg.

Dolo 650 mg has also been used to treat other outbreaks such as Chikungunya and dengue fever.

In response to the allegations of freebies, the company stated that it is in discussions with government authorities and has provided relevant documents.