Reliance Retail may partner Sandoz for drug retailing

The Financial Express has reported that Reliance Retail is in final stages of talks with Sandoz, generic arm of Swiss pharma company Novartis and second largest generic company in the world, to outsource generic drugs manufactured by Sandoz.

Reliance Retail plans to open 5000 Reliance Fresh stores by 2009 and each one would have an exclusive chemist shops for Sandoz drugs. As per the proposed deal, generic drugs manufactured by Sandoz India would be marketed by Reliance Pharmaceuticals Ltd.

Reliance is also in talks with a major Mumbai based drug distribution group, for entering into a sole supplier deal for selling other companies’ drugs through Reliance Retail’s outlets.

The move may work well for Reliance Retail as well as consumers as consumers will get cheaper drugs since the chemist margin of 10-16% is cut down. On the other hand, Reliance Retail would get access to popular generic drugs and get itself a wider foothold in the market.

Also, with the issue of spurious drugs coming in the limelight, consumers would prefer to buy OTC and prescription drugs from the retail chains rather than the chemist shops.