The inclusion of insulin glargine in the National List of Essential Medicines (NLEM) 2022 released on September 13 may result in Sanofi India taking a ₹110 crore hit on its annual revenues from its flagship glargine brand Lantus, estimates stock broking firm Nirmal Bang.
“The NLEM inclusion will lead to a price ceiling on the company’s Insulin Glargine, which we expect to be 20% lower compared to the existing price of Lantus. We estimate Lantus’ annual sales in India for Sanofi at ₹550 crore and hence the impact due to price reduction on revenue would be ₹110 crore. The impact from this event on the margins could be contained if the parent company, which supplies Lantus to its Indian subsidiary, lowers supply prices,” Mitesh Shah, research analyst, Nirmal Bang says in an investor note.
Noting that there are five major brands in the Insulin Glargine Injection 100 IU/mL space in India -- Lantus (Sanofi), Basaglar (Eli Lilly), Basalog (Biocon), Basugine (Lupin) and Glaritus (Wockhardt), the broking firm says that at the revised ceiling price, the price gap among brands will narrow and patients could prefer the innovator product (Lantus) over competitors’ products.
Since 80% of insulin users in India are on human insulin and these patients would eventually transition to Insulin Glargine orother modern insulins, Nirmal Bang sees Sanofi’s Lantus become more affordable and hence be a better option for diabetes patients. “Apart from the impact of transition, the burden from diabetes is increasing due to unhealthy lifestyle habits and a higher rate of diagnosis. Improved volume should partially offset the decline in annual price hike that Sanofi India may be able to take on Lantus going forward”, the investor note says.
The NLEM 2022, launched by health minister Mansukh Mandaviya included 34 new drugs on the list and dropped 26 medicines from the previous NLEM 2015 list. Four medicines that enjoy patent protection in India have also found a place in the revised NLEM 2022 for the first time. The four patent-protected anti-infectives in the revised NLEM list are Bedaquiline, Delamanid, Doulutegravir and Daclatasavir.
Overall, there are 384 drugs across 27 therapeutic categories in the revised NLEM 2022.
