Margin pressures on cholesterol reducing drugs

Margin pressures on cholesterol reducing drugs continue to rise in the regulated international generic markets.

According to Utkarsh Palnitkar, Head -- Health Sciences, Ernst & Young, "The margin pressures continue to rise in the regulated international generic markets due to increasing competition from Indian, Chinese and other low-cost destinations. Aggressive brand defence by innovator companies (via launch of authorised generics) and increasing bargaining power of large distributors in these markets are also the contributors."

The attractiveness of the US market has suffered some setback, especially for the large generics companies targeting exclusivity. The reasons include legal challenges by patent holders delaying and increasing the cost of launch and authorised generics taking away large market share.

"These factors have severely impacted the exclusivity-related profits that generic players seek from the US market," he added.

The export focus of Indian pharma companies continue to be the regulated markets, specifically US and Russia wherein Indian companies dominate the generic statin business. These two markets are closely followed by UK and continental Europe.

According to Rena S Ahuja, industry analyst, Healthcare Practice, Frost & Sullivan, "The pricing pressure though currently is on the down-turn, the time span between 2002"�2005 is critical from EU markets standpoint since a couple of anti-cholesterol molecules were going off-patent and at that time there was a possibility of Mevacor (Merck) going OTC way."

In terms of volume, the market still lies in US and Europe because pharma companies in these markets are very aggressive in getting them listed in the NIH (National Institutes of Health) reimbursement schemes. "This applies infact for any cardiovascular drug," she added.

The estimated size of Indian market is Rs 580 crore (2007) for anti-cholestrol drugs. The global cardiovascular market is about $115 billion, out of which about $36 billion is the market for dyslipidemics (medical term for an unhealthy blood lipid (fat) profile) / cholesterol reducing drugs.

Only few companies are into manufacturing of statins such as Lovastatin, Simvastatin, Atorvastatin, Pravastatin and Rosuvastatin. The Indian statin manufacturers like Biocon, Ranbaxy, Themis Medicare and Zydus Cadila have strong export focus.

"Market share of branded statins seems to be diminishing. Due to the patent expiries of statins that have taken place in the past five years (especially that of Zocor) and those going to take place in the near future (especially that of Lipitor) branded statins seem to be losing their market share," said Utkarsh Palnitkar.