Business Standard

Authorised generics to spoil Indian drug show

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Joe C Mathew New Delhi
The first-to-file advantage in the US was the big dream Indian pharmaceutical firms were chasing for the last few years.
 
It gave them 180-day exclusivity to market the generic version of a drug after its patent expired. With Indian firms holding these rights for blockbuster drugs such as Pravastatin (worth $209 million), Simvastatin ($513 million) and Ondanseteron ($639 million), it was projected that these would see sharp jump in turnover.
 
However, most Indian pharmaceutical companies find that global drug firms which hold the patents for most of these drugs have punctured their dream with authorised generics - cheaper variants produced by firms "authorised" by them. 
 
DEFT MOVE
CompanyPara IV challengeTherapeutic areas
RanbaxyPravastatinAnti-cholesterol
RanbaxySimvastatinCardiovascular
Dr ReddysOndanseteronAnti-nausea
Sun PharmaGemcitabineCancer
Sun PharmaTramadolPain management
 
Satish Reddy, managing director of Dr Reddy's Laboratories, said there could be authorised generics in all 31 first-to-file opportunities being pursued by the company in the US.
 
Ranbaxy has factored in the presence of authorised generics in all its 20 first-to-file opportunities. Sun Pharma is also known to have a similar outlook for its dozen plus first-to-file opportunities.
 
"Generics companies will have to factor in the presence of an authorised generic for every product in the US. It is a reality. Para IV challenge (first-to-file opportunity) is still an attractive option, though there can be a marginal decline in profits with the presence of an authorised player. Every extra player means a price erosion in the range of 10-20 per cent," Sujay Shetty, associate director (pharmaceutical advisory services), PricewaterhouseCoopers, said.
 
"Authorised generics have become a part and parcel of doing business in the US. In the case of simvastatin 80 mg, we could garner a market share of over 55 per cent in 2006, in spite of the presence of the innovator's product and an authorised generic," said a Ranbaxy official.
 
Some Indian pharmaceutical companies are trying to address the problem by becoming suppliers of authorised generics. Dr Reddy's has sealed a deal with Merck for the launch of the authorised generic versions of Merck's Zocor (simvastatin) and Proscar (finasteride).
 
While Reddy said such deals could happen on a case-to-case basis in future, the Ranbaxy official said the company was open to making authorised generics.
 
This business model could take a decisive turn soon. The authorised generic factor will continue to remain prominent unless the US Congress takes a decision upon a pending bill meant to stop authorised generics and ensure true exclusivity for generics player.

 

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First Published: Jul 11 2007 | 12:00 AM IST

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