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The Searle Company: Dexamethasone – Breakthrough drug for Covid-19; widely available in Pakistan

  • Dexamethasone, an anti-inflammatory drug, becomes the first proven drug to reduce the risk of death in Covid-19 patients
  • Within the listed names, Dexamethasone is produced by SEARL’s subsidiary Luna Pakistan and ICI’s subsidiary Cirin Pharma
  • Dexamethasone has shown better progress in clinical trials and is cheaper than Remdesivir

A UK government-funded trial has immediately approved Dexamethasone, an anti-inflammatory drug (corticosteroid), to treat all hospitalised Covid-19 patients requiring oxygen, including those on ventilators. The drug has been proven to reduce the risk of death significantly among Covid-19 patients on ventilation by as much as c35% and patients on oxygen by c20%, hence reducing the total 28-days mortality rate by 17%. Dexamethasone has been used since the early 1960s to treat a wide range of conditions, such as rheumatoid arthritis and asthma.

Dexamethasone is readily available in the Pakistan as a generic drug

Dexamethasone is readily available in the Pakistan as a generic drug (listed on the WHO Model List of Essential Medicines since 1977 in multiple formulations) and is currently off-patent and affordable in most countries. Dexamethasone is also available in Pakistan’s National Essential Medicines list and produced by several non-listed companies. Within the listed names, the medicine is produced by SEARL’s subsidiary Luna Pakistan and ICI’s subsidiary Cirin Pharmaceuticals. Luna Pakistan is the holding company of OBS Pakistan, which actively produces this drug. It is the second largest by value within one of OBS’s portfolio of companies (Merck Sharpe and Dohme or MSD) marketed by the name of Decadron at a price of PKR50-80/4mg vial. ICI’s recently acquired subsidiary Cirin also markets dexamethasone under the brand name Adrenaal at a price of PKR250/4mg vial.

Generic drugs tend to draw thinner margins and higher volumes

Decadron (dexamethasone) is the second largest drug by volume in OBS’s portfolio company (MSD) and should likely witness a surge in volumes during the remainder of 2020. That said, generic drugs are dime a dozen with more versions of dexamethasone likely to flood the Pakistani market in the coming days, in our view. Generics tend to draw lower margins; however, OBS’s portfolio fetches c.30% gross margins on its overall sales, as per channel checks. We think this is a welcome development for SEARL, although formal amalgamation of Luna into SEARL is yet to take place. SEARL has already availed board approval for the amalgamation on 24 April in its Annual General meeting. SEARL has also recently entered licensing and marketing agreement with Beximco Pharmaceuticals Bangladesh for sale of Remdesivir in Pakistan. 

Dexamethasone may outshine Remdesivir

This is the second drug after the antiviral drug, Remdesivir, to materially benefit Covid-19 patients without major side effects. However, while Remdesivir appears to shorten recovery time for patients from 15 days to 11, the evidence for reduced mortality is still not adequate. However, dexamethasone has shown better progress in trials. Moreover, the price difference between the two is substantial given that Dexamethasone is a generic while Remdesivir (c. PKR10,873/100mg injection US$66@PKR164.744) is being exclusively marketed by Gilead Sciences on a partnership basis. That said, Dexamethasone is yet to be formally approved by WHO as a treatment for Covid-19 patients (while Remdesivir already is).

Hoarding and profiteering may begin

Federal Minister on National Health Services Dr. Zafar Mirza has said that a technical team in Pakistan will consider using Dexamethasone medicine to treat those critically ill with Covid-19. Punjab government has already started to monitor and control the sale of  the drug (injection and tablet) in a bid to prevent profiteering and hoarding after the Oxford University confirmed yesterday that it can be used to save lives of critically-ill Covid-19 patients. Some doctors in Punjab have confirmed that they are already prescribing Dexamethasone, both in the public and private sector, for Covid-19 patients.


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