Slowdown in drug sales

Growth was about 16 per cent in the first seven months, down from 18 to 19 per cent in the same period last year.

Panya Kitjaroenkankul, general manager for pharmaceuticals at Merck Thailand, said that despite the market slowdown, the company expected to grow significantly by 15 per cent this year to Bt2 billion in revenue.

Between Bt800 million and Bt900 million will come from pharmaceutical sales, which are expected to increase by 25 per cent. The other revenue will be from chemical products, which have seen smaller growth at about 10 per cent this year.

"Our growth has been driven by the launch of new innovative products as well as newly acquired businesses," said Panya.

Merck last year acquired Serono, one of the world's leading hormone producers.

As inflation makes it mark, many people with reduced purchasing power have shifted their medical access from general drugstores to hospitals in order to benefit from the government's social-stimulus packages such as the Bt30 Golden Cards.

"We have seen very clearly the significant drop in sales of pharmaceutical products distributed through drugstores, where growth is now declining to less than 10 per cent," said Panya.

"Challenged by higher inflation and less purchasing power, people have decided to go to hospital rather than doing any self-medication when they have a health problem."

Panya said Merck Thailand had been also affected by the depreciation of the baht against the euro, which had caused the prices of many imported medical products to increase by between 7 and 10 per cent since the beginning of the year.

"However, we have no plan to raise prices of our pharmaceutical products, as they have been closely regulated by the Internal Trade Department.

What we have done is cut our operational costs, both for marketing and sales," said Panya.

"We have also focused on boosting efficiency in our working process and on prioritising our work so that all resources are fully utilised and provide maximum benefit."

Merck Thailand recently introduced its latest product in the Seven Seas range - a multivitamin with Lysine.

Panya said that although the children's vitamin market in Thailand was quite small, it had grown continuously over the past few years to more than Bt100 million in value last year. The company expects the market to grow by up to 7 per cent this year despite the current economic difficulties.