Vol. 5, No. 11-12 Nov.-Dec. 2001

Cipla has stated that it has received governent approval to launch a three-drug combination for HIV treatment. The three drugs are zidovudine (300 mg), lamivudine (150 mg) and nevirapine (200 mg) in one tablet. The three-drug combination branded Duovir-N is the first of its type in the world and will ensure better patient compliance since it is easy to administer (twice daily). The three drugs are patented by different multinationals but can be manufactured in India because India doesn’t recognise product patents.

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051202 Ranbaxy Gets Approval from USFDA for Lisinopril

Ranbaxy Pharmaceuticals wholly-owned subsidiary of Ranbaxy Laboratories has received tentative approval from US FDA for the hypertension drug Lisinopril tablets USP, 2.5 mg, 5 mg, 10 mg, 20 mg and 40 mg. Lisinopril has been found to be bio-equivalent and therapeutically as effective as Zestril tablets.

Lisinopril is prescribed for treatment of hypertension, either alone or as initial therapy or along with other classes of anti-hypertensive agents. It is also indicated for heart failure and treatment of hemodynamically stable patients to improve survival. Sales of Lisinopril totalled $ 1.2 billion in the US of which Zestril accounted for 0.66 billion. Ranbaxy’s ANDA for Lisinopril and Hydrochlorithizide is also outstanding with the US FDA.

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051203 Dr. Reddy’s Export Earning Jump Because of Prozac

Dr. Reddy’s Laboratories has shown a 213 per cent jump in exports to Rs 298 crore of which Rs 163 crore came from the off-patent Prozac – the anti-depressant drug. The United States is the largest market for off-patent drugs in the world. Analysts are of the view that with the intense competition in the domestic market, the shortfall in domestic sales can only be met by improved marketing in international markets. Domestic growth rate of pharmaceutical companies have been in low double digits or even single digits. Ranbaxy’s domestic sales increased only 9 per cent to Rs 275.8 crore and Cipla’s grew 12 per cent and DRL grew by 14 per cent.

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051204 Wockhardt’s New Anti-bacterial Drug Enters Trials

Wockhardt claims to have discovered a new anti-bacterial drug. The company has applied to the Drugs Controller General of India for approval to start human trials on the drug code named WCK 771. The drug will be useful for hospital-contracted infections like: sepsis, skin suture infection, pneumonia, etc. The market for hospital-acquired infection drugs have annual global sales of $ 1 billion. The DCGI, according to new rules, is supposed to grant or deny permission for trials within 90 days from the date of application. The company has also filed for product patent with the Indian Patent Controller under the Paris Convention Treaty and US Patents and Trademarks office.

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051205 Glenmark Gets Approval to Launch Linezolid

Glenmark Pharmaceuticals has been approved by the Drugs Controller General of India to introduce a novel antibiotic called Linezolid in India. Linezolid is a new drug discovered by scientists at Pharmacia. Glenmark’s drug branded Lizolid is useful in life-threatening infections and resistant strains of certain organisms. It is administered to patients after surgery to fend off infections contracted in hospitals. The drug prevents bacteria from making proteins at a very early stage and as a result there is little chance of cross-resistance (a term that means when a bacteria develops resistance to any antibiotic it becomes resistant to any antibiotic that uses the same mode of action). Linezolids are effective in case of resistance to vancomycin, an antibiotic prescribed for hospital infections.

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051206 Lupin Inaugurates R&D Facility at Pune

Lupin, the company formed by the merger of Lupin Pharmaceuticals and Lupin Chemicals has inaugurated a new pharmaceutical research and development facility in Pune, Maharashtra. The total investment in the facility is estimated at Rs 37 crore and it will be equipped with laboratory equipment worth 20 crore which has been shifted from the company’s facility in Mandideep in MP and Aurangabad in Maharashtra.

The research centre will have 150 scientists of whom 100 are already employed in Mandideep and Aurangabad. Two R&D executives, formerly with Ranbaxy, have joined Lupin to head the drug discovery and drug delivery system wings. Reportedly, Ranbaxy was the first to invest in original research in anticipation of a new product patent regime. The new facility at Pune will move away from doing plant support functions to original research.

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Mergers, Acquisitions And Restructuring

Wockhardt’s redesignating its medical representatives as officers have stirred a hornet’s nest with the external union (the Federation of Medical & Sales Representatives Association of India – FMRAI) claiming this as illegal. The company’s strategy was that by doing so the re-designated employees don’t have the right to strike as they now fall under the management category. FMRAI had organised a nation-wide strike on May 17 and a dharna outside Wockhardt’s Mumbai headquarters on June 4 in protest against this move. However the company maintains that it is their prerogative to promote their employees and that they were only promoting their employees.

Meanwhile, Wockhardt Life Sciences is in talks with US-based Baxter International to sell its intravenous fluids business. Baxter is a world leader in the IV business while Wockhardt ranks second in the local market.

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051208 Wockhardt’s Attempt to Buy Out Rhein Stake Hits Road Block

Wockhardt’s attempt to buy out the 50 per cent stake of its partner Rhein Biotech in Wockhardt Rhein Bio-Pharm which manufactures recombinant Hepatitis-B surface antigen has hit a road block with FIPB stalling the proceedings. Wockhardt’s intention was to buy out the entire 50 per cent stake of the Dutch partner and pay a royalty of 5 per cent annually (net after taxes) upto 2011 for the two products licensed to the joint venture. The company is now waiting for the government and FIPB’s okay to go ahead with the deal. The joint venture has a capital of 18 crores.

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051209 Morepen in Talks with DrugMax for US Generic Market

New Delhi-based Morepen Laboratories is in talks with US-based DrugMax Inc to penetrate the US off-patent market. The idea is for Morepen’s portfolio of generic or off-patent drugs to ride the DrugMax marketing network in the US. The two entities are working on a joint venture company to be registered in the US in which Morepen will hold 51 per cent stake. Morepen is currently working on introducing several drugs which will go off-patent in the near future. The new joint venture will involve both these new off-patent drugs as well as older ones. The drugs to be thus marketed will have to be first approved by the US FDA.

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051210 Sun Pharma Increases Stake in MJ Pharma

The 613-crore Sun Pharmaceuticals has hiked its stake in the loss-making MJ Pharma by another 20 per cent. Sun Pharmaceuticals now holds 72 per cent of MJ Pharmaceuticals’ equity. MJ Pharma has accumulated losses of Rs 28 crore, long-term loans of Rs 20 crore and short-term loans of Rs 5 to 7 crore. Sun has authored a revival plan for MJ Pharma which is before the Board of Industrial and Financial Reconstruction (BIFR) which will involve selling the formulations unit located in Halol, Gujarat, and merging the rest of the company with itself. Sun also plans to revive a bulk drugs unit of MJ Pharmaceutical located in Ankleshwar, Gujarat.

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051211 Novartis Will Not Market Dr. Reddy’s Diabetes Drug

The Danish company Novo Nordisk which is currently taking Dr Reddy’s Laboratories’ diabetes drug DRF 2725 through clinical trials has announced that its partner Novartis AG (its prospective marketing partner in the US) will not market the drug in the US, Canada and Mexico. However, the deal between DRL and Novo Nordisk is safe and both partners will continue their joint venture. DRF 2725 is a novel dual-acting insulin sensitiser for treatment of type 2 diabetes. The trials on the new drug will continue as scheduled. Novo Nordisk is in the process of finding a new partner to market the drug in the US.

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Government Policies

A new trade round may be in the offing as ministers from 142 countries of the WTO failed to reach an agreement over the text to be adopted by the Fourth Ministerial Conference at Doha, Qatar. In the just concluded round India can claim some success. India has succeeded in diluting the agreement on trade related intellectual property rights (TRIPS) to benefit its own pharmaceutical and public health industry. Moreover, the work programme that will ready the agenda for the Fifth Ministerial Conference in 2003 will study modifying TRIPS to link it to Biodiversity Convention that will benefit Indian traditional Ayurvedic medicine. India has also introduced legislation in parliament that is in concurrence with the new WTO norms.

Food security and rural development concerns of India have been noted by the WTO conference through protection from imports. But no significant progress has been made on India’s demands on textiles and patents. India had demanded textile quotas should be dismantled earlier than 2005 or at least quotas should be increased. But overall, the pharmaceutical and TRIPS side have seen, at least, temporary victory for India.

India has agreed to the declaration that will ensure that expensive western drugs will be available to it. The US has made some concessions on making available patented drugs to poor countries and has agreed to review anti-dumping rules. The European Union has made concessions on phasing out farm export subsidies. Developing countries don’t want environment protection to be a big issue in WTO because they fear that such standards will keep their products out of developed markets. Other issues rejected by developing countries are: protecting investment; assuring equal application of competition; making government procurement more transparent and easing red tape at custom offices.

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051213 IPA Alleges Thomas Trade Promotion Bill Will Affect India’s Drug Exports

Barely has the dust settled over the WTO conference than the Indian Pharmaceutical Alliance (IPA) has alleged that the Thomas Trade Promotion Authority Bill pending in the US congress will affect India’s interests. The bill seeks to "eliminate government measures such as price controls and reference pricing which deny full market access to US products". India already has the Drug Prices Control Ordinance (DPCO) in force which makes available drugs at affordable costs to the poor and needy.

The bill also calls for accelerated implementation of Trade Related Intellectual Property Rights (TRIPS) which has been a bone of contention in the Doha conference. If implemented Indian companies fear that their access to the US market will be in jeopardy while that of US products to India would get a fillip. India is a leading exporter of price-competitive generic and off-patent drugs to the US and less developed countries. If TRIPS requirements are foisted on Indian exporters it would affect their profitability. The IPA has asked the commerce ministry to seek clarifications on the bill from the US government before the bill is passed.

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051214 Pharma Exporters and Customs Lock Horns over DEPB

Pharmaceutical exporters and customs department are at daggers drawn over the interpretation of Duty Entitlement Passbook Scheme (DEPB). DEPB is an export incentive which repays import custom duties paid by exporters on various inputs imported by them to manufacture the exported product. Custom authorities have sent letters to exporters claiming "excess" duty credits with 24 per cent interest per annum from the date of utilisation of this excess credit. According to DPEB custom duty paid is calculated as a per cent of the value of exports. In case of some bulk drugs the government has capped the value of exports on which duty credit is calculated. In the case of formulations containing the bulk drug, there is no cap on value. Exporters say that customs department has been fixing a value cap on formulations despite the ministry of commerce’s specific clarifications. If there is more than one bulk drug the value is arrived at taking into consideration the percentage of the bulk drug in the formulation.

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With the breakthrough case of the multinational E Merck paying Merck KGAA a royalty for the use of its brand name, it has become clear that multinationals and corporates can henceforth pay brand-name owners a royalty to use a brand name. E Merck had put this up before the Foreign Investment Promotion Board and has got the latter’s approval to go ahead with this arrangement. The company argued that the brandname/trademark fee should be set as a percentage of the net domestic sales and exports rather than being linked to the ex-factory sale price of the product. The FIPB has accepted this arrangement following consultation with the Reserve Bank of India.

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Reportedly, Dr. Reddy’s (DRL) has lost its six-month marketing exclusivity in the US for Omeprazole 40mg capsules. The company had hoped to make use of this exclusivity following its filing of a patent challenge to the US Patent No 4,255,431 listed for Omeprazole. However USFDA maintains that it cannot grant the exclusivity for the product due to expiry of the patent and also its six-month paediatric exclusivity prior to the first commercial marketing of the drug. The six-month marketing exclusivity has now been given to Andrx Pharmaceuticals. However Dr. Reddy’s is going ahead with its policy of filing patent challenges to develop its generics business.

In another development a US company has filed a patents infringement suit against DRL for its generic fluoxetine (generic version of Prozac) after DRL declined to licence the patent from AAI Pharma. DRL has a six-month exclusivity market this anti-depressant drug in the US. The real patent on the drug owned by its innovator Eli Lilly expired on August 2, 2001. However AAI owns certain substance patents that makes it capable of demanding royalty payments from generic manufacturers. However, DRL considers this a small issue and feels that the claim is invalid.

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DRL’s loss has been Cipla’s gain with India’s third-largest drug maker’s associate Andrx Corp getting the six-month exclusivity to market Omeprazole in the US. Andrx has an understanding to source the bulk drug of Omeprazole exclusively from Cipla. Omeprazole, an anti-ulcer drug is sold under the brand name Prilosec by AstraZenecca and Andrx will sell the drug’s first off-patent version. Prilosec has annual global sales of $ 6.3 billion with $ 4.3 billion coming from the US.

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