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This article was first published 16 years ago  » Business » Pharma firms bank on brand extensions to boost growth

Pharma firms bank on brand extensions to boost growth

By Joe C Mathew in New Delhi
June 19, 2008 02:32 IST
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Stiff competition in a highly fragmented market has led the domestic drug makers to depend on brand extensions rather than new product launches to corner a market share.

A market intelligence study, organised by prescription audit company ORG IMS Health, has found that one in every three brands launched in the country is a brand extension. Such products comprise 18 per cent of the Rs 28,000-crore  domestic pharmaceutical market.

"Among the top 300 brands, almost half are brand extensions," ORS IMG Health Managing Director Shailesh Gadre said. The study found both multinational and domestic companies to be interested in introducing new medicines in such a manner in India.

Brand extensions are common in industries such as automobiles and fast-moving consumer goods. But in the drug market, such a phenomenon is specific to India.

Instances of brand extensions are common among anti-infectives, cardiac care, dermatology and anti-diabetic medicines, the report said. This, according to experts, is due to more than 20,000 pharma companies in the country and the absence of product patents before 2005.

Companies were free to produce any medicine as long as they used an unpatented process. There are almost 60-70 brands of all popular drugs, making brand-building a difficult proposition.

Companies said brand extensions are used to indicate different dosage or a different delivery mechanism of the same drug, though the basic medicine remains the same.

"There are also situations where companies add a few letters to the existing brand to indicate an additional component added to the basic drug," CM Gulhati, editor of the Monthly Index of Medical Specialties said.

"It (brand extension) is a global practice for mature products, and in today's times even for newer products," a Novartis spokesperson said.

Novartis' leading brand Voveran has at least six brand extensions.

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Joe C Mathew in New Delhi
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