Novartis India Ltd has decided to terminate its exclusive distribution and promotion agreement with Dr. Reddy’s Laboratories Ltd (DRL), bringing an end to a strategic partnership signed in 2022 for the marketing and sale of several established medicine brands in India.
The company’s Board of Directors has approved the termination of the distribution and promotion agreement dated February 11, 2022. The termination agreement was executed between the two companies on August 7, 2026, and will take effect from September 30, 2026.
Following the termination, Novartis India will re-acquire exclusive rights and market access for the portfolio of products that had been exclusively promoted, distributed and sold by Dr. Reddy’s under the agreement.
The partnership had granted Dr. Reddy’s the exclusive and non-transferable rights to promote, distribute and sell a range of well-known Novartis brands, including the Voveran pain management portfolio, the Calcium range and Methergine, while Novartis AG retained ownership of the global trademarks.
Strategic reversal
The decision marks a significant shift from the strategy adopted by Novartis India in February 2022, when it partnered with Dr. Reddy’s to leverage the latter’s extensive sales force and distribution network to expand the reach of its established medicines across India.
At the time, Novartis had said the arrangement would combine its manufacturing and product development capabilities with Dr. Reddy’s commercial strengths, enabling wider patient access to its medicines, particularly in underserved markets.
The collaboration was also aimed at improving the availability of mature brands by tapping into Dr. Reddy’s nationwide field force and distribution infrastructure.
Impact in 2022
The 2022 agreement had a significant impact on Novartis India’s workforce. The company had announced that around 400 positions would become redundant as a result of the strategic restructuring, with affected employees offered severance packages and outplacement support.
Shortly after entering into the distribution partnership, Dr. Reddy’s also agreed to acquire Novartis India’s cardiovascular brand Cidmus for $61 million, further strengthening its branded formulations portfolio in the country.
Market to watch next
Novartis India has not disclosed the reasons behind the termination of the agreement or outlined how it plans to manage the sales and distribution of the affected brands after regaining exclusive control.
The move is expected to be closely watched by the pharmaceutical industry, given the importance of brands such as Voveran, Calcium and Methergine in the domestic market.
With the agreement ending on September 30, Novartis India is set to resume direct control over the commercialisation and market access strategy for these products.