Companies

Eurolife to address global IV infusions shortage from Teva’s facility in Hungary

PT Jyothi Datta Mumbai | Updated on October 02, 2019 Published on October 03, 2019

In July, Eurolife said it had acquired Teva’s IV infusions plant in Hungary for an undisclosed sum   -  NICHOLAS KAMM

Home-grown Eurolife Healthcare expects to service global shortages in intravenous (IV) infusions from a manufacturing facility in Hungary that it recently acquired from Israeli drugmaker Teva.

“The situation is still dire with supplies in Europe and the US,” Eurolife Healthcare’s Chief Executive Officer Sandeep Toshniwal told BusinessLine, on the potential that exists because of the “gap in demand and supply from USFDA-approved plants”.

In July, Eurolife said it had acquired Teva’s IV infusions plant in Hungary for an undisclosed sum. The plant was available following the rationalisation Teva undertook after its $40-billion buy of Actavis in 2016.

For Eurolife, the plant offers proximity to markets it needed to service, said Toshniwal, The company had been scouting for an overseas location when the opportunity came up, he said, adding that the acquisition did not include employees.

Touted to be the first Indian company to build its IV base overseas, Toshniwal said it would invest €50 million over three years “to build one of the single largest IV plants in the world at this location”.

Operating in a segment that faces shortages overseas and price-control in India, Toshniwal said the company’s earlier experience in contract-manufacturing for foreign companies would help keep the cost-quality balance.

“We learnt to keep cost low for the two companies and make money (in contract manufacturing). Besides, the company faced constant company and country audits on quality systems,” he added.

Exports from India

The Hungary plant will not alter Eurolife’s exports from India, presently at about 14 per cent. “All income from Teva Europe will be generated in Europe and in Euros. Therefore, they won’t be exports from India, but our international income will move up to 30 per cent of our turnover,” he said. In 2017, Eurolife had acquired US healthcare firm Baxter Internationals’ IV business in India, a move that expanded its footprint from the North into the South and West as well.

The aim is to be in all volumes of parenterals, large and small, Toshniwal said. About 90 per cent of Eurolife’s turnover of ₹280 crore, for the year ended March 2019, comes from IV, he added.

IV infusions are life-saving medicines and, in India, the segment is pegged at ₹3,000 crore, growing at about 9 per cent annually. This, however, is expected to pick up “due to higher penetration and number of hospitals and increased healthcare services, both private and public, across the country”, said Toshniwal.

With a lion’s share of its IV products on the National List of Essential Medicines (NLEM) and facing price-control by the government, Toshniwal said the company is looking at greater backward integration to cut supply-chain cost.

It plans to increase its own depots from three to 20, besides its own fleet of trucks from 14 to 40, he said, to service the last-mile needs of hospitals. This would increase the quality of service and tighten distribution costs, he added.

Published on October 03, 2019
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