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Dr Reddy’s German Contract Impact

December 3, 2008

AOK (Allgemeine Ortskrankenkassen), German group of public health insurer, has indicated partial (44 APIs out of 64) results for the recent bidding for its two year tender. Amongst Indian players, DRL (Betapharm) has the highest interest in AOK business.

According to DRL, it has won 29 contracts so far (out of 220 awarded so far), which relate to seven APIs (out of 33 APIs bid by DRL). In our view, what matters is the value of contracts won (rather than the number of contracts), price compression.

We await results of the AOK tender for the balance of 20 APIs and disclosure by DRL on the net impact of AOK tender on its German business.

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