DECADES OF PATENT POWERPLAY TO BOOST AFFORDABLE MEDICINE
India's 2005 change in patent regime became a true paradigm shift: flagship generic companies such as Cipla, Ranbaxy Laboratories,
Zydus Cadila, Lupin, and Dr. Reddy's Laboratories had emerged on one side of the spectrum, while an increasing presence of
MNCs in India's domestic market space concurrently took place on the other side. For the latter, the strategies to tackle
the very fragmented, competitive, and price-sensitive Indian market varied significantly. Japanese innovator Astellas, for
example, has been one of the youngest entrants, having set up offices in India only in 2009. Its managing director, Teruo
Yasufuku, points to the robust 2005 patent law in justifying a full presence. "India's growing economy, the lifestyle changes,
and the affordable income increase, are also some of the factors we used in our evaluation to decide whether it would be really
viable or feasible to set up an Astellas subsidiary in India," he says. To establish its presence in India, Astellas chose
its flagship product Prograf, a cornerstone immunosuppressant to prevent organ rejection in transplant recipients. "We launched
Prograf at the end of March 2010, at a time when 19 generic versions were available. Yet, after one year of sales, we can
say that Prograf is already the second-most-prescribed immunosuppressant for new patients," says Yasufuku.
Ascribing the success to the know-how, the global network, and over 20 years of product experience in nearly 100 countries,
Yasufuku and the Prograf story give high hopes to innovators that may have held back to compete in the backyard of the world's
largest generic labs. Those that took the courageous leap may—by now—have realized that there are two markets in India, and
a range of branded generics actually complements an innovator portfolio. "Launching quality branded products at a very competitive
price is what makes the difference at Pfizer," says Kewal Handa, managing director of the Indian subsidiary of the world's
No. 1 pharma major.
Kewal Handa, Managing Director of Pfizer
The decision of a number of prominent Indian generics players to sell their portfolios to MNCs has sparked various sentiments
in the corridors of the Indian pharma scene. Recent eye-openers, such as the 2008 acquisition of Ranbaxy by Daiichi Sankyo
and Abbot's 2010 deal to take over Piramal's domestic branded formulations business, certainly reveal what has been boiling
beneath: a drastic change in India's pharmaceutical terrain.
"Now, what are Indian companies doing?" asks Dilip Shah, secretary general of the Indian Pharmaceutical Alliance (IPA), representing
the interests of the country's leading domestic pharmaceutical companies. Shah continues, "One, they are building marketing
infrastructure, and selectively getting into various countries where they can compete independently. At the same time, Indian
companies are looking to capitalize on Big Pharma's push to enter emerging markets via generics. Other things that Indian
companies are doing include looking at African markets to establish local production and reinforcing their presence in mature
markets. For the mature markets, some Indians are growing via acquisition."
D.G. Shah, Secretary General of IPA
Satish Reddy, managing director and chief operating officer of Dr. Reddy's Laboratories, confirms that some of the company's
key growth drivers in 2010 came from international markets, and comments that "at the top of the list are the USA, India,
Russia, and Germany, followed by countries such as Venezuela." Other flagship Indian generics players, such as Cipla, Zydus
Cadila, and Lupin, have similarly been increasing their international footprint. "You need to remain aware of the fact that
India still only captures 1.5% to 2% of the world's pharmaceutical markets. With 98% of the market share outside of India,
you have to ask yourself how to grow, and how to grow rapidly. In that pursuit, you have to prepare yourself to partake in
advanced geographies, where you can be part of a larger pie," comments Lupin's managing director Kamal Sharma.
Kamal K. Sharma, Managing Director of Lupin