Feature

A new prescription

Tectonic changes in the US generic drugs market is causing  huge shifts in Indian pharma’s strategies as well 

When the world’s best-selling drug goes off patent, you know it’s big news for pharma companies everywhere. At Ranbaxy India, though, the drama was magnified. For three years, it had been wrangling with the US Food and Drug Administration over charges of falsified data and quality issues. And as the deadline for the expiry of Pfizer’s Lipitor patent neared, the Indian company was no closer to getting approval for its generic version of the cholesterol-lowering drug.

The approval came in early November 2011, dangerously close to the November 30 deadline. Even then the suspense continued with the FDA announcing its approval, withdrawing it and then announcing the go-ahead once again. Still, Ranbaxy did become the first to launch a generic version of Lipitor. As the first company to have successfully challenged the Pfizer patent, the company held the privileged first-to-file (FTF) status, giving it the right to market its copycat version exclusively for 180 days (the only competition during this period was the original innovator product). 

But, really, was it worth all the tension and effort? The original brand-name drug retailed for about $165 for a 30-day supply (less in the case of insurance co-payments) but generic avorastatin sold for about 70% less. When the exclusivity period ended on May 29, eight firms were already prepared to enter the market with their own versions of the drug, and prices are now down 96%. It hasn’t helped that Pfizer has been on a marketing offensive for Lipitor, offering insane discounts to persuade insurers and patients to not switch to generic substitutes.

It’s not just Lipitor and its copycats: all generic drugs bear the brunt of sharp price erosion, especially in the competitive American market. And Indian pharma companies, which get a significant share of their revenues from selling generic drugs to the US (see Earnings from Uncle Sam), know that all too well. Which is why they’re changing the way they operate and sell off-patent drugs globally. 

Changing dynamics

Until recently, the most important numbers in Indian pharma weren’t topline and bottomline but the number of abbreviated new drug application (ANDA) filings and approvals. ANDA is a mandatory submission to the US FDA by any generic drug company looking to market its reverse-engineered v

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