Tax probe heat on Micro Labs, maker of India's go-to fever pill Dolo-650

Bengaluru-based pharma firm Micro Labs, the maker of the popular paracetamol brand Dolo-650, is under the scanner for alleged tax evasion. The tax department is looking into financial records, balance sheets, and business distributor networks as part of their searches.

Micro Labs had been in news during the Covid-19 pandemic, during which its paracetamol brand became a household name with the brand showing 74 per cent growth between July 2020 and June 2021.

Sheetal Sapale, president-marketing, AWACS, a research and analytics firm, said that Dolo contributed to around 7 per cent of the company turnover in pre-Covid times. This contribution has moved up to around 14 per cent now. “In the paracetamol market, Dolo had a market share of 15 per cent in pre-Covid-19 times; this has moved to 24 per cent now. It has overtaken Calpol, the market share which has remained 20-22 per cent in the past five years,” she explained.

The journey of Dolo is captivating. Dolo-650 is a successor of Dolopar, the brand with which Micro Labs began its journey in 1973. G C Surana, an accountant from Rajasthan, had moved to Bangalore (now Bengaluru) in search of a job, and eventually set up a pharmaceutical distribution business. Soon after, Surana started a pharma company with five products and a factory in Chennai.

Dolopar was among the first five products. But, in 1993, the company hit on a novel idea -- it launched paracetamol in a 650-milligram strength under the brand Dolo-650.

Paracetamol is used for the remission of pain, inflammation, and fever, and there should be a gap of six to eight hours between two consecutive doses. Otherwise, there are chances of side effects. At that time, the existing paracetamol brands were of 500 mg strength. In cases of high fever, 500 mg of paracetamol may fail to give relief, and taking two doses at short gaps may cause other health issues. Thus, Dolo-650 became a favourite among doctors and consumers alike.

During Covid-19, most patients were suffering from high temperatures, and the sales of this brand skyrocketed.

Sandeep Nangia, president, retail distribution-Chemist Alliance, Delhi, pointed out that the simple and catchy name, too, helped sales. “Now there are other brands which come with 650 mg strength. But Dolo is a simple name, and customers can remember it. Also, there was a huge buzz on social media with memes floating around on Dolo. That actually helped sales pick up further,” Nangia said.

Stockists said that during the pandemic, supplies of other key brands like Calpol (GSK Pharma) and Crocin (GSK Consumer) were intermittently hit, leading to more demand for Dolo-650. Calpol sales touched Rs 377 crore (MAT June 2022); Dolo-650 sales topped it with Rs 407 crore (MAT June 2022). MAT is moving annual turnover or the turnover of the past 12 months.

Micro Labs makes the drug at its Sikkim plant. It has 17 manufacturing sites in India and now has a presence in over 50 countries. Surana’s sons have joined their father -- Dilip Surana joined in 1983 and focused on expanding Micro Labs from a south-focussed firm to a pan-Indian company. Sapale said that today, Micro Labs is among the top 20 players in the Indian pharma market with a market share of around 1.7 per cent.

“The top 10 brands contribute to around 30 per cent of Micro Labs turnover. These brands had collectively shown growth of 27 per cent in the July 2020-June 2021 period, which accommodates the Covid second wave period,” she said.

Dilip Surana’s brother, Anand Surana, too, joined the company later, and he has spearheaded their exports strategy. It now has a presence in regulated markets like the US and EU.

Dolo is contributing 14 per cent to Micro Labs turnover, but it is not a single-brand company. It has a presence across segments like cardiology, diabetes, ophthalmology, psychiatry, antibiotics, and dermatology.