Pharma gameplan: Fight patents in US

NEW DELHI: Indian pharma majors are increasingly resorting to litigations against extension of patents by MNCs in the US market.
MNCs often seek extension of patents, which are initially granted for up to 20 years, on the grounds of introducing new dosage, usage or composition of a drug. That blocks other firms from entering the market, keeping drug prices from falling.
However, USFDA rules (para IV certification in Waxman Hatch Act) permit other (generic) firms to challenge these extensions on the grounds that the reasons for extensions are often weak and keep them from entering the market and making drugs affordable.
Ranbaxy and Dr Reddy''s — the two Indian firms who operate in US — have shown the girt to take on flimsy extension seekers, and for a good reason: To take a greater share of a near-future $ 50 billion generic drug market.
While MNCs are increasingly adopting this extension strategy to block generic entries in view of few molecule finds and lot of patent expiries in near future, the Indian strategy is to find weak expanded patents and fight them out in the US courts, say DRL and Ranbaxy.
And, if the case is won, the generic manufacturer is allowed to launch a bio-equivalent of the patented drug, before the patent expiry, without infringing the patent.
While the cost of litigation is significant, benefits are huge. A win offers a generic manufacturer 180 days exclusive marketing rights for that particular drug (have to be first to challenge the patent in certain dosage or usage) which promises a huge revenue generation opportunity.
DRL sees huge revenue opportunities in para IV litigation which can be invested back in its own new molecule drug discovery research, says a spokesperson. Out of 39 new drug applications filed by DRL, 20 are Para IV ones. And, this 20 patented drugs have a market of $18 billion in the US, he adds.
A Ranbaxy spokesperson echoes the view. The company has a cumulative 27 Para IV applications and 12 of this are of first to file status.
It has recently won a Para IV case for launching 250mg and 500mg of Ganciclovir capsule (an equivalent of Roche Pharma''s Cytovene; market size $31.9 million in April 2003). Ranbaxy introduced the dosages in July and enjoys 180 days exclusive marketing rights on them. DRL also own a major case against Eli Lilly''s anti-depression drug Prozac and launched Sluoxetine and earned huge revenue.
However, it''s a high-risk-high-gain area. While according to Ranbaxy, per litigation cost is $2-3 million or even more, industry sources say both DRL and Ranbaxy spend around $12-14 million on an average annually on litigation. However, huge revenue streams (even with a 50 per cent success) worth the effort, sources add.
According to DRL, to minimise the risk, one needs to widen the Para IV basket for gain to more then offset the losses. Also, more important is to develop an intellectual patent management skill to successfully identify the weak patent and win the battle.