Emergic: Rajesh Jain's Blog

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Indian Pharma Success Story

April 8th, 2004 · No Comments

Forbes writes: “India makes great knockoff drugs. Now one company is originating its own–squaring off against US giants.”

Protected by the country’s patent law, which recognizes processes but not products, most Indian pharmaceutical companies have been content to remain copycats–and small ones, at that. That cozy world is about to be shattered: Next year new laws will prohibit the cloning of medicines patented after 1995. That will restrict Indian companies from flooding the domestic market with generic fabrications and force them to invest in producing their own homegrown drugs.

Ranbaxy is better prepared than most rivals. It was an early investor in R&D, and its experience of selling to Western markets gives it an additional leg up. The company has 81 generic products approved by the U.S. Food & Drug Administration and 40 pending approval, including 22 challenges of patented drugs (among them: one for Pfizer’s cholesterol-battering blockbuster, Lipitor). Recently a U.S. federal court upheld Ranbaxy’s patent challenge against GlaxoSmithKline’s Augmentin, a product that augments the unpatented antibiotic amoxicillin with a chemical that attacks a bacterial defense against antibiotics. According to a Credit Lyonnais Securities estimate, Ranbaxy’s U.S. sales of the generic version of this combo pill approached $66 million last year.

Such windfalls are funding Ranbaxy’s big gamble: basic drug research. “If you’re poor and try to be conservative, then you can only conserve your poverty,” says Rashmi Barbhaiya, head of research at Ranbaxy Laboratories in New Delhi.

We need Indian software companies which can do something similar.

Tags: Emerging Markets

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