Mumbai: Drug makers Dr Reddy’s and Piramal Healthcare have obtained approval from the government to manufacture codeine, a narcotic that is key raw material for both companies.
Besides Dr Reddy’s and Piramal Healthcare, about 20 domestic pharma companies depend on codeine, used to make cough syrups and pain relieving drugs.
Both companies would make codeine for other players too. As codeine is a narcotic, its production was controlled by the government in its two factories.
“Dr Reddy’s has decided to set up a plant in Andhra Pradesh to manufacture codeine,” its spokesperson said.
Piramal Healthcare, formerly Nicholas Piramal, has not yet decided where to set up its plant.
Investments in a codeine plant would be about Rs 100 crore and take three years to complete.
“It (plant) will cost around Rs50-100 crore depending on its location and infrastructure,” Piramal Healthcare Director Swati A Piramal told PTI here.
Dr Reddy’s is working out the final cost of the project. Last year, production of codeine in the two government factories was stopped because of fire in those units.
Non-production of codeine led to shortage of the narcotic in the domestic market and dented the Q1 results of Piramal Healthcare, for which codeine is a key raw material, in the last financial year.
Hence, the government decided to import the narcotic.
Last year, Piramal Healthcare Chairman Ajay Piramal on behalf of industry body Confederation of Indian Industry met Finance Minister P Chidambaram to ask for speedy import of codeine. The Minister had promised to look into the issue.
For Piramal Healthcare, setting up a codeine factory would be a backward integration and would help it avoid the shortages of the past, Swati A Piramal said.