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.
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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. | |||||||||||||||||||||