Dolo 650 maker says Rs 1,000 crore 'freebies' are total expenditure over several years

The Supreme Court on Thursday was told by an NGO that the Central Board of Direct Taxes has accused the Bengaluru-based drug firm of distributing Rs 1,000 crore freebies to doctors. Following this, a Micro Labs spokesperson refuted the reports saying it has been falsely and maliciously alleged that the company has been distributing freebies worth Rs 1,000 crore to promote Dolo 650 in one year.

"This is highly misleading and is affecting the reputation of Micro Labs, pharmaceutical industry and doctors," the spokesperson said.

Dolo 650, a paracetamol drug, is a fever and pain-reducing medicine that shot to fame during COVID-19 and in many instances is becoming the ‘go-to’ pain-reliving drug.

During the COVID-19 time period of March 2020 to January 2022, the oral pain market grew 23 percent due to pandemic-related demand. Paracetamols were prescribed over other molecules such as ibuprofen to treat COVID. It is during the COVID-19 period of around March 2020 to February 2022 that Dolo 650 mg rose to become the highest-selling paracetamol drug.

During this time period, the Dolo brand led by the 650 doses grew to enjoy a 22 percent share of the total Rs 3,100 crore worth of paracetamol-based drugs sold during the COVID-19 period, which means 22 out of 100 people were choosing to buy Dolo amongst all paracetamol drugs during that time.

In terms of sales for Dolo, the 650 mg dose despite being under price control or the National List of Essential Medicines managed to generate sales of over Rs 300 crore between March 2021 to February 2022. The sales in some cases were over 10 to 30 times of other comparative drugs.

Doctors and experts point out that what tends to happen is that the brand becomes sticky. Keeping allegations of freebies aside, experts explained that doctors tend to follow other doctors in terms of prescribing a drug and this was possibly happening even more during the pandemic. Dolo, experts said, grew because of strong word of mouth resulting in the brand almost becoming a default drug during the period.

The Dolo 650 mg brand, which was launched in 1993, was one of the first movers in the market and has at one point even enjoyed 80 to 90 percent market share in the 650 mg category. Eventually, the market share settled at around 50 percent and shot up to 58 percent during COVID-19. Interestingly, the Dolo brand sees this kind of stickiness only for the 650 mg despite selling other strengths such as 500 mg.

Dolo 650 mg has also been used during other epidemics such as Chikungunya and dengue.

Amid the freebies allegations, the company said it is in discussion with government authorities and has provided documents related to the issue.