Recently, a controversy bubbled up regarding the marketing strategies of Micro Labs, a Bengaluru-based pharmaceutical company. Micro Labs, the maker of Dolo-650, was charged of having bribed medical doctors with freebies worth ₹1,000 crore in one year to promote Dolo-650.
Dolo is an analgesic and antipyretic — a non-steroidal anti-inflammatory medication to help with fever and mild pain. It can be purchased from a chemist without a medical prescription. It is actually plain paracetamol, which is a particularly crowded market and fairly competitive too, in a manner of speaking. The Drugs (Prices Control) Order (DPCO) has established ceiling prices for over 850 medicines, including of brands of paracetamol. The ceiling price for a single 650 mg paracetamol tablet is ₹1.83 and for a single 500 mg tablet, it is ₹0.91. It is naturally more profitable for 650 mg to be sold. But how profitable, exactly? Do the incentives work out for the firm? In particular, does the economics work out in terms of giving away ₹1,000 crore of freebies?
