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A herbal remedy for a product patent regime

Rumi Dutta in Mumbai | March 29, 2004 09:25 IST

Nicholas Piramal chairman Ajay Piramal says the Mumbai-based pharmaceutical company is eyeing a foray into herbal prescription drugs.

"We expect to be a significant player in this segment in the near future. This segment offers a huge growth potential. The herbal drugs category is growing at a considerably faster rate than allopathic drugs."

Piramal is not alone. Hordes of Indian pharmaceutical companies are either leaping into herbal drugs or planning on doing so. Cipla, Elder Pharma and RPG Life Sciences are quietly looking at entering this segment.

Cipla's Joint Managing Director Amar Lulla confirms that the Mumbai-based company is planning a major move into herbal drugs: "The herbal drug segment holds a bright future."

Ranbaxy Laboratories, Lupin Labs and Alkem Labs recently announced they would be entering the herbal prescription drug business. What is more, even companies that already have a minor presence in herbal drugs are planning a to expand.

The herbal medicine market is primarily dominated by Himalaya, Dabur, Charak Pharmaceuticals and a large number of smaller regional companies.

Why have herbal drugs suddenly become the hottest pharmaceutical business segment? Herbal drugs are gaining significant acceptance worldwide.

Elder Pharma's Director Alok Saxena points out that India has a rich herbal drug tradition. More to the point, in 2005 India will recognise product patents -- it now recognises only process patents. So western pharmaceutical companies could have an edge in product patents. Their Indian rivals, meanwhile, are rushing into an arena where all products are not yet patented -- herbal drugs.

 "In the herbal drugs segment, the patent laws are not structured. It could provide a low-cost alternative for developing drugs catering to several therapeutic areas," says Murli Ramchandran, managing director of RPG LifeSciences.

Others cite other reasons. Says Cipla's Lulla: "A large percentage of our people has started believing in this form of alternative medicine." Indeed, pharmaceutical industry analysts believe that the emerging trend of self-medication and the preference for natural products with minimal side-effects will drive the growth of the herbal drug market.

The Rs 4,000 crore (Rs 40 billion) Indian herbal drug market, which is split between ethical -- that is, drugs that require a doctor's prescription -- and over the counter drugs, is growing by over 15 per cent a year against the compounded annual growth rate of around 8-9 per cent reported by the Rs 20,000 crore (Rs 200 billion) allopathic drugs market.

Globally, the herbal medicine market is valued at around $60 billion, half of it in Europe alone. Small beer when compared with the $400 billion allopathic drugs market.

Most observers say that Indian companies will first launch ethical herbal drugs in India, and will later develop new drugs, focus on exports and try to conquer the world -- a prescription followed by their allopathic counterparts in India.


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