Latest pact follows trend of pharma MNCs sourcing products from generic makers here.
UK-based drug maker AstraZeneca has entered into a long-term drug supply deal with Ahmedabad-based Torrent Pharmaceuticals.
The $32.8-billion AstraZeneca, second largest drug company in Britain, becomes the third big multinational innovator in recent times to enter generic supply deals with an Indian company.
AstraZeneca would initially purchase from Torrent the licences and market authorisations for 18 products in nine countries. Further products and countries may be added. The deal’s financial details weren’t disclosed.
| DRUG SUPPLY DEALS | ||
| Timeline | Companies | Deal |
| June ’09 | GSK - Dr Reddy’s Lab | 100 branded generic drugs |
| Mar ’09 | Pfizer - Aurobindo | Supply of 70 drugs in US, Europe and France |
| May ’09 | Pfizer - Aurobindo | Expanded alliance for another 55 drugs for developing markets |
| May ’09 | Pfizer - Claris Lifesciences | 15 injectables |
| Jan ’10 | Pfizer - Strides Arcolab | 40 off-patent drugs, mainly for cancer |
| Mar ’10 | AstraZeneca - Torrent | 18 products in nine countries |
| (Source: BS Research Bureau) | ||
The Rs 1,184-crore turnover Torrent has a similar supply agreement with Denmark- based Novo Nordisk to supply insulin products. The company, which markets its products in over 50 countries, has manufacturing units at Chhatral in Gujarat and Baddi in Himachal Pradesh.
Seven of AstraZeneca’s drugs, including its three biggest selling ones — Nexium for ulcers, anti-cancer drug Seroquel and cholesterol lowering drug Crestor — would lose patent protection by 2014.
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“Working in partnership with Torrent will extend the range of branded medicines we can offer to patients in emerging markets, where we see continuing opportunities for our business to grow,” said Tony Zook, head of AstraZeneca’s global commercial organisation. The deal comes two days after Andrew Witty, chief executive of GlaxoSmithKline (GSK), the second largest drug maker in the world and the largest in the UK, said he was looking at long-term drug sourcing alliances and acquisitions in India.
In June last year, GSK had entered into a drug sourcing pact with Dr Reddy’s Laboratories for supply of 100 branded pharmaceuticals in various therapeutic segments.
Similar agreements were concluded last year by Pfizer, the world’s largest drug maker, with Aurobindo Pharma, Strides Arcolab and Claris Lifesciences.
While the US-based Hospira bought the injectable business of Orchid, French multinational sanofi-aventis had acquired Hyderabad-based vaccine maker Shanta Biotech, to access production facilities in India.
India can manufacture drugs at one-fourth the cost of production in developed countries.
The dwindling pipeline of new drugs and patent expiry on existing new drugs are forcing multinational innovator drug companies to seriously look at branded generic pharmaceuticals or copycat versions of patented drugs as a serious business.
Emerging markets are forecast to contribute around 70 per cent of pharmaceutical industry growth in the next five years.