The increasing number of patent litigations in the US against Indian pharma companies and the emergence of patent challengers such as Sun Pharma, Lupin, Orchid and Glenmark are an indication that Indian generic drug makers are coming of age in their attempt to tap the $50 billion market for reverse-engineered generic versions of patented drugs in the US.
Industry experts cite the 10 patent violation cases against Indian pharma companies in recent months. Many of these companies were not traditionally known for taking the patent challenge route (filing of an abbreviated new drug application with the US Food and Drug Administration with Paragraph IV certification) to tap the US market.
The increasing number of generic players tapping the US market for known molecules has resulted in pricing pressures and lean margins.
This is one of the reasons why even medium and emerging Indian generic majors are increasingly looking at the Para IV route, the experts added.
The US prescription market stood at $274.9 billion in 2006, while the generics market was valued at $50 billion, according to IMS Health.
"Apart from the seasoned patent challengers such as Ranbaxy and Dr Reddy's, which have a significant US generics market share at about 2.5 per cent and 1.8 per cent respectively, a number of new companies are now adopting the Para IV route. Though this involves risk and huge litigation costs, the significant growth of these companies in the recent past, coupled with enhanced R&D capabilities and financial power to fight litigations, has encouraged them to try the challenging route. It is the best option for margins and big growth in the generics business," said Pakhi Jain, a Mumbai- based pharma analyst.
Pakhi added that many blockbuster drugs would go off-patent in the near future and companies were sensing the opportunity. It is estimated that drugs worth $50 billion would go off-patent progressively by 2015 and a significant share of these drugs are in the United States.
"The trend on patent challenges is towards out-of-court settlements and authorised generics versions being assigned by the innovator companies. The first to file ANDA opportunity has an opportunity to make a killing during the 180-day exclusivity period. An increasing number of Indian companies are realising the potential in this", said Sarabjit Kour Nangra, pharma analyst with Angel Broking.
The analysts also note that many of these challengers have first-to-file status. For example, out of the 88 ANDAs filed by Ranbaxy, 20 are believed to have first-to-file status.
"It is difficult to know in advance whether one filed a first-to- file ANDA as the US FDA keeps that information confidential until the patent expires," noted Uday Baldota, vice president, international relations, Sun Pharma.