Health Matters | The Dolo-650 controversy is a tale of flawed economics, good memes and bad luck

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Remember how fondly we used to talk about the popularity of Dolo-650mg when you, me and everyone else was taking this drug due to Covid-19 related illness?

Driven by a high fever, one of the most common symptoms of Covid-19, sales of this oval-shaped white pill doubled and social media was flooded with memes claiming it is the drug “the more salable” in India.

But time, as they say, changes.

Today, the maker of Dolo-650mg, Micro Labs, has been accused of offering freebies worth Rs 1,000 crore to doctors to promote the fever-busting drug.

To clarify, Micro Labs is not officially accused of bribery or corruption. They are only investigated for tax evasion.

However, the company is facing a reputational crisis with allegations of “unethical marketing practices”. Meanwhile, the medical regulator National Medical Commission (NMC) is seeking details from the income tax department of the doctors whose names were unearthed during the raids at the drug company.

The move will discourage doctors from prescribing the brand, as they may not want to go under the scanner or be part of a controversy.

In the latest ruling on Thursday, the Supreme Court raised concerns about drug companies’ marketing practices and specifically pointed to the Dolo controversy.

The PIL filed by medical representatives lobby (sales force of pharmaceutical companies) Federation of Medical and Sales Representatives Association of India (FMRAI) claimed that the manufacturer of Dolo was offering gifts to doctors.

In fact, Justice DY Chandrachud, head of the judiciary, called it a serious problem and said (quoted by Bar & Bench): “It’s not music to my ears. I was also asked to have the same when I had Covid. This is a serious matter and matter.

Now the Center has been asked to file a response within 10 days.

While the link between pharmaceutical companies and doctors is not new to discuss and there is no law or regulation to curb it, there are several loopholes that make this controversy slightly flawed.

Let’s start talking about these shortcomings.

Rs 1,000 crores spent for the promotion of “paracetamol”!

Dolo-650 is an antipyretic pill made using one of the most common and oldest generic formulations known as paracetamol.

Paracetamol, a generic salt, is a common pain reliever used to treat pain and reduce high temperatures and has been on the market since the 1960s.

Crocin, Sumo, Dolo or Calpol – these are different names given by pharmaceutical companies selling the same salt, paracetamol, under their copyright brand. Therefore, it is not an innovative, patented and complex drug manufactured by Micro Labs.

To add to this, paracetamol is an essential drug and falls under the government’s price control mechanism, which means that the company cannot increase or fix the price of the drug beyond the threshold decided by the government.

The price set by the government for this category of drugs is the same for all brands, not just Dolo-650. The price per tablet of Dolo-650 from Micro Lab, Paracip from Cipla, Sumo from Alkem and Calpol from Glaxo SmithKline is the same – Rs 2 per tablet or a strip of 15 tablets for Rs 30.

Why would a smart pharmaceutical company spend Rs 1,000 crore on a price controlled drug? What did it pay to spend lavishly on marketing?

Data is more chaotic and tells the same story

They say data never lies.

According to Micro Labs, the company generated revenue of Rs 350 crore from sales of Dolo-650 in the last financial year ending March 2022. The duration includes the theft of Dolo-650 given the huge second wave followed of the third wave of Covid -19 infections.

So, did the company spend Rs 1,000 crore to generate revenue of Rs 350 crore? Is it just a bad economy or other shortcomings?

I spoke to three industry insiders who have worked or are working at senior levels at pharmaceutical companies. Although it is incorrect, alleging and confusing if I tell their version of the stories and opinions on the controversy, they all felt that Micro Labs must have generated a profit of not more than Rs 20-30 crore on revenue of Rs 350 crore of sales of this drug.

“It’s a low-margin category that lacks appeal. The chance of winning is extremely low. This category can only be used to establish a brand name and recall value among doctors and patients,” a manager working with a major Indian drugmaker, who has worked on a portfolio of “paracetamol for more than a decade.

The economy now is even more chaotic. Does this mean that the company spent Rs 1,000 crore for a mere profit of Rs 30 crore?

In short: out of the group’s turnover of Rs 4,000 crore, Micro Labs spent 25% or a quarter of the money in marketing expenses on a single product and that product is the price-controlled paracetamol. Overall, it offers more than 400 products covering high-margin categories including cardiology, diabetology, ophthalmology, dermatology, and psychiatry.

What is the figure of Rs 1,000 crore?

Let us understand how the figure of Rs 1,000 crore was calculated.

According to Dolo-650 senior executives’ widely read interview on multiple media platforms, “Income tax sleuths have aggregated the total marketing spend of all divisions of the company over the past few years to arrive at a figure of Rs 1,000 crore”.

Company and industry sources have confirmed to me that the Rs 1,000 crore estimate includes the marketing and promotion expenditure of the entire Micro Labs over the past six to seven years. “Then it will not be equal to Rs 1,000 crore. It’s a weird number, God knows how it was calculated…maybe bits were taken here and there…” an official linked to the company told me.

Several industry officials believe that any drug with a “decent R&D expenditure” will not require such promotional expenditure, forget the sale of paracetamol.

Perhaps we need more details on how the Rs 1,000 crore figure was calculated.

Dolo: a former market leader

The treatment protocol published by the apex health research body, Indian Council of Medical Research (ICMR) and Ministry of Health and Family Welfare (MoHF&W), prescribed the use of ” paracetamol 650 mg” instead of the more common 500 mg of the same drug.

This was followed by an increase in the prescription of Dolo. But it wasn’t newfound fame. Dolo remained the market leader in the 650 class for several years. The company’s first entry in the 650 milligram (MG) category had created the perception that it was more effective against fever due to unknown diseases.

On average, as of 2018, the brand had captured more than 50% market share, followed by Calpol, according to AIOCD-AWACS data. In fact, in 2010, Dolo-650 received the Best Managed Brand of the Year award. Subsequently, it was recognized as India’s most admired brand, followed by several other recognitions.

So there is no surprising increase in Dolo-650 activity and according to Micro Labs a similar increase in sales was noticed even during dengue and chikungunya.

What was different this time was the internet frenzy and the hilarious, clever, trending memes. So, was that the only trigger for the controversy or was there other strong evidence?

The essential…

It’s no secret that corporations spend money on doctors and the unholy connection exists. But, on the other hand, if this issue is more important, then no will has been shown by the government to curb the practice.

Despite requests from several lobbies and NGOs, the government has not made the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) mandatory. This is a guide for pharmaceutical companies on the do’s and don’ts of bringing products to market.

In this case, further investigation is needed to establish whether Micro Labs is completely at fault or partially at fault or at no fault, but one point is clear: it cannot be a single pharmaceutical company bribing doctors or distributing gifts.

All the other pharma companies are probably to blame, and the whole ecosystem needs to be fixed. To dilute the serious problem by singling out Dolo is the manufacturer’s bad luck!

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