Merck allows Dr Reddy's to sell authorised generics of blockbuster drugs
By Our Corporate Bureau | 02 Feb 2006
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In a strategically significant deal for the Indian pharma industry, Dr Reddy's has entered into an agreement with Merck to sell two of the latter's blockbuster drugs as authorised generics once they go off-patent. This is the first time an Indian generic company is entering into a tie-up with a global major to launch authorised generics.
Until now generic companies, including Indian majors such as Ranbaxy and Dr Reddy's, have been mounting patent challenges against the pharma multinationals. These multinationals usually attempt to seek extensions after the expiry of the initial patent as in the case of Pfizer's Lipitor with Ranbaxy challenging the patent extension.
If successful, the generic company, which is the first to file the challenge, will get 180-day market exclusivity for its generic version after the patent expiry under US laws. However, the original patent holder can also market a generic version of its own drug even during the 180-day exclusivity period.
The patent-holder can also allow another generic company to launch an authorised generic version. This provision significantly reduces the potential gains to generic companies from patent challenges, as there would be a competing generic product even during the exclusivity period.
Under the deal with Merck, Dr Reddy's would launch generic versions of Merck's Zocor and Proscar, which are going off patent in the US this calendar year. The deal would be applicable only if a generic company gets 180-day market exclusivity.
Zocor is a statin or anti-cholesterol drug with annual global sales of close to $5 billion. This is the second-largest selling drug after Pfizer's Lipitor, another statin. Ranbaxy has already filed a patent challenge for Zocor.
Proscar, a drug with annual sales of $600 million is used to treat enlarged prostate glands. Israel's Teva is expected to be the first generic company to file a challenge for this drug.
Dr. Reddy's closed at Rs 1,179 (up 5.18 per cent) on the NSE yesterday.
Until now generic companies, including Indian majors such as Ranbaxy and Dr Reddy's, have been mounting patent challenges against the pharma multinationals. These multinationals usually attempt to seek extensions after the expiry of the initial patent as in the case of Pfizer's Lipitor with Ranbaxy challenging the patent extension.
If successful, the generic company, which is the first to file the challenge, will get 180-day market exclusivity for its generic version after the patent expiry under US laws. However, the original patent holder can also market a generic version of its own drug even during the 180-day exclusivity period.
The patent-holder can also allow another generic company to launch an authorised generic version. This provision significantly reduces the potential gains to generic companies from patent challenges, as there would be a competing generic product even during the exclusivity period.
Under the deal with Merck, Dr Reddy's would launch generic versions of Merck's Zocor and Proscar, which are going off patent in the US this calendar year. The deal would be applicable only if a generic company gets 180-day market exclusivity.
Zocor is a statin or anti-cholesterol drug with annual global sales of close to $5 billion. This is the second-largest selling drug after Pfizer's Lipitor, another statin. Ranbaxy has already filed a patent challenge for Zocor.
Proscar, a drug with annual sales of $600 million is used to treat enlarged prostate glands. Israel's Teva is expected to be the first generic company to file a challenge for this drug.
Dr. Reddy's closed at Rs 1,179 (up 5.18 per cent) on the NSE yesterday.
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