Ranbaxy/Dr Reddy's Collaborate On Antiulcerant Levant

India's Dr Reddy's Laboratories has signed an agreement with domesticdrugmaker Ranbaxy Laboratories to manufacture an antiulcer drug formulation based on lansoprazole, which Ranbaxy will market under the name of Levant.

The agreement is designed to create more value for DRL's bulk drugs, and will utilize lansoprazole manufactured at its Hyderabad plant. Pharmaceutical industry sources have said that other large local drugmakers are also likely to follow Ranbaxy's arrangement with DRL, which aims to cut costs.

According to the local Financial Express, this is "a win-win situation for both companies." It says Ranbaxy gets a drug made on an as-required basis, while DRL, through greater production, can distribute its overheads better. Rather than setting up capacities or operating at lower capacity utilization, such arrangements are beneficial for both partners.