Focus on Prices

Focus on Prices Hansavivek GLAXO LABORATORIES (INDIA) complains that it has not received a single approval to increase the price of any of its bulk drugs or formulations during the past 30 months, and that its profit margins have been eroded despite higher sales, extensive economies, improved efficiencies and productivity measures. The directors have welcomed the schemes for the recognition of installed capacities and for their automatic growth as announced under the Industrial Policy last July, The hope that the drugs policy will now be implemented in conformity with the current pragmatic view of the government that increased production and full utilisation of capacities is of paramount importance to the nation's development. But the chairman, S Bhoothalingam, feels that the application of these policies seems to be retarded through complicated procedural arrangements. He fears that these principles may not be fully applied to the pharmaceuticals industry, and that capacities may be frozen at the level of production in a previous year, Glaxo was able to step up its sales from Rs 67.49 crore to Rs 72.49 crore during 1979-80, but its gross profit barely edged up from Rs 11.28 crore to Rs 11.48 crore. Net profit was Rs 4.82 crore (Rs 4.04 crore). The directors have recommended a total dividend of 16 per cent on the capital enlarged by a one-for- three bonus issue, as against 20 per cent paid last year. The effective in- creased distribution was covered 1.78 times against 1.67 times previously. The company's exports increased by 21 per cent to reach an all time high of Rs 2.69 crore. A beginning has been made in. the export of its food products* Higher potency calcium sennosides have been received well in Europe, US and Japan. Regular commercial production of meclozine hydrochloride started during the year. The management has decided to transfer a part of the company's capacity for secondary manufacture to a factory to be established at Nasik, a 'backward' area in Maharashtra. The proposal to manufacture new bulk drugs at the Thane factory has been reviewed in consultation with government and a modified list of new bulk drugs has been finalised. These will be manufactured at a new factory to be established at Ankleshwar, a 'backward' area in Gujarat.