THE EDITORIAL

Address,The rising cost of medicines has been a major concernto consumers and health groups worldwide in recentyears. There also has been an ever increasing demandfor low cost medicines. Thus, for many Big Pharmacompanies the way ahead now seems to be ‘GENERIC’.Also many pharmaceutical companies are nowcollaborating with the companies manufacturing genericdrugs, to expand their share in this segment. Thus, wehave decided to take up the generic drugs industry asthe subject matter for this issue.An intensive study has been done by the students toanalyze the global generic pharmaceutical industry, itsrapidly changing battle lines and India’s position in thesame.We also bring to you the second part of the Mergers &Acquisitions series, this time featuring Indian companiesand cross border deals.In the BT news section we have taken up the issue of theIndian generic drugs facing problems in the African marketand the Indian government’s move against the same.On the same lines we bring to you an exclusive interviewwith Mr. Sameer Kolhe.Also, a section to keep you updated on the latesthappenings at PUMBA.Your feedback and suggestions are welcome at:thepumbagazette@gmail.com The past belongs to us, but we don’t belong tothe past. We belong to the present. We are the

‘MAKERS’

of the

‘FUTURE’

- M.K.Gandhi

Wish You A Happy Reading!!Sincerely Yours,Chief Editor: Tejaswini Lunkad, MBA-BT(Semester- II) (The PUMBA Gazette Team)

CONTENTS

•

Cover

Story

--Generics- The Way Ahead…

•

Art

es/Ana

--Merge

Emerge

•

News

--Africa- Anti-Counterfeit or Anti-Generics?

•

Cand

--An

nterview

with

Mr.

Sameer Kolhe

, A.G.M –International Business, Indoco Remedies Ltd.,Mumbai

•

PUMBA

News

--Achievers

‘

Generics- The Way Ahead…

The term “generics” rings in the boardrooms of most bigand small pharmaceutical companies, dominating mosttalks, strategies and deals. Generic, the non patentedversion of a patented drug can be of two types – When acompany selling a copy of an established product decidesto give it a brand name, it becomes a brandedgeneric. However, if the generic company opts to sell theproduct on the basis of the molecule name alone, itbecomes a generic generic.Generic drugs now account for more than $40 billion inprescription sales worldwide. Although the amount seemsvery small as compared to the global revenue of $730billion at the end of 2008, generics still form a major volumeof drugs being sold. It is due to their low prices that their share in revenue is less. According to analyst reports, theglobal generic industry is expected to grow 10-12% over thenext five years due to a number of drugs going off patent.The number of new launches, IND applications andapprovals is also coming down each year.

And with therising number of patented drugs going off protection everyyear, the revenue from innovative drugs will grow veryslowly.A number of players are now entering the generic market towin back revenues that would otherwise be lost due topatent expiry. Given the astronomical cost of launching anew product, companies have slowed down new launches.An ever increasing pressure on companies to bring downthe costs is another reason to enter the generic market. Ageneric launch drastically brings down the cost of aparticular therapy, which it remains quite profitable tillcompetition is low enough. Also there is increasingconsolidation among generic manufacturers to achievegreater vertical integration, scales and R & D. The number of legal proceedings involving generic companies andinnovators is rising rapidly. Global pharma giants have beenfiling cases against generic companies for attempting tomanufacture generic versions of their patented products.The legal complications are due to Para IV filing of Waxman-Hatch law in USA. Under this, a generic companyis granted permission to market a patented molecule beforeits patent expires, under the stipulation that it does notinfringe upon the existing patent. It also gives the genericcompany exclusive 180 day marketing rights; during whichno other generic company can enter the market. In asuccessful case profits of millions of dollars can be made inthis span.India has also achieved a strong foothold in the globalgenerics market. In 2002 Indian companies accounted for less than 7% of all generic drugs approved for marketing bythe US FDA; however they accounted for over 20 % in2006. India's share in the total DMF filings has increasedfrom a mere 14% in 2000 to about 50% in 2007 .In terms of ANDA approvals as well, India's share has gone up from15% in 2005 to about 25% in 2007 (Jan-Jun).It is predictedthat by 2020 India will become one of the top three genericsdrug makers in the world. The fact that India has a largenumber of FDA approved manufacturing facilities outsidethe US is the biggest advantage to India.Governments of the world are also taking measures toreduce the ever rising health costs, one of them beingpromoting generics. The US president Barrack Obama is astaunch supporter of generic drugs. He seems likely toallow for the re-importation of drugs, with a caveat that theprices of the re-imported drugs should be lower than their cost in the US. Allowing re-importation would provide Indianmanufacturers an increased access to the profitable USmarket. The Indian government has plans to set up ‘genericdrugstores’ across the country to facilitate access toaffordable medicines. Under the proposal, the governmentexpects to open generic stores, through NGOs, Red Crossand hospitals that are willing to work on a no-profit basis.Companies participating in this program are expected tooperate on very low margins but bank on high volumes.This is expected to boost the domestic generic market.In rest of the world too generics forms a major part of thedrugs. With generic competition intensifying in USA,companies are now focusing big time on the Europeanmarket. Analysts at Frost & Sullivan say that Frenchgenerics market is currently growing with the fastest rateamong the EU 5; Italy is the slowest among the top 5.Japan with annual sales of $58 billion constitutesapproximately 11% of the world's pharmaceutical market.But unlike in the US or in Europe, generic drugs in Japanare still perceived as inferior to the brandedones. However, as the country's healthcare bills soar, thegovernment is increasingly encouraging the use of generics. Ranbaxy was the first Indian company to enter this massive market, followed by Lupin, Cadila andDr.Reddys.With all this happening the big companies have alsodecided to safeguard themselves. The originator companieshave developed “life-cycle management plans” composednot only of patent strategies, but an entire range of practices aimed at limiting or delaying the entry of a genericproduct into the market. Licensing of “authorized generics”to maximize their profit potential, at the same timepreventing the entry of other generic players is practiced.Pfizer’s tie-up with Greenstone to market a generic versionof Zoloft is an example. In an attempt to maximize theproduct life cycle and delay the entry of genericcompetition Innovator companies routinely file applicationsseeking approvals for new indications of existing productsfacing patent expiry.The next frontier in this battle would be in the field of biotechnology. It will comprise biopharmaceuticals, stemcell therapy, gene therapy, novel vaccines etc. The uniquefeature of these products is that they are extremely difficultto copy or make a generic of. Companies that succeed inthe endeavor to launch biosimiliars will have struck a jackpot. Realizing this, Roche spent over $40bn to purchaseone of the world’s largest biotech companies, Genentech.This segment has so much of potential that all major pharma companies have taken large steps to capitalize onit. This presents enormous future potential for the genericplayers too.

Compiled by: Kiran Dond, Queeny Bubna, Vishakha Laddha (MBA-BT)(Sem II)Mentor:Amit Sasmal (MBA-BT, Sem IV