Commentary: Indian Copycat Drugs Cheer New US Law

CALCUTTA, India, Nov. 5 (UPI) -- Even as pharmaceuticals giants such as Pfizer or Merck fight raging legal battles against India's upstart drug-makers for swamping their markets with cheap copycat drugs, a new law formulated by the United States Food and Drug Administration is threatening to make it easier for Indian drugs to enter the U.S. market.

According to the Indian drug industry, in the FDA's new method of drug approval called 505(b)(2), the Indian generic drug manufacturers have found an easier and faster route to enter the United States.

Dr. Reddy's Laboratories Ltd. has already benefited from the FDA's rule 505(b)(2), getting the FDA's approval mid-October for AmVaz (Amlodipine Maleate), a slightly different version of Pfizer's second largest selling drug, Norvasc. This antihypertension drug was a major winner for Pfizer, which garnered $3.8 billion in sales last year.

Faced with a mounting health bill the United States government has been encouraging the entry of generic drugs. And to speed up approvals for generic firms filing for approvals in the U.S. markets, the FDA has formulated a controversial hybrid statutory approval mechanism known as a 505(b)(2) new drug application, which drug makers can use if a generic drug they are trying to sell is not a virtual duplicate of an original patented drug.

For most generic drug makers within and outside the United States, 505(b)(2) is the most preferred route for seeking approval because it allows the chemistry of the copycat drug to differ slightly while keeping the main ingredients the same, and it also doesn't mandate a proof of safety and effectiveness.

Meanwhile Indian drug-makers' invasion in the U.S. markets is emerging as a tough pill to swallow for large drug multinationals, who thrive on original and patented but high-priced drugs. In fact the Indian drug industry has a standing joke that if honchos of global drug makers draw up a list of people they like the least, it would probably be overwhelmed with the names of Indian pharmaceutical CEOs.

That's because when Indian drug makers like Dr. Reddy's, Ranbaxy, Cipla and the like decide to crack the global markets they do not simply wait for the patent to expire, as many generic drug makers do. Instead, they turn to lawyers and ask them to exploit a loophole in an existing patent, and consequently, file legal challenges on a range of drugs that seemingly have years of exclusive sales left.

The approval bagged by Dr. Reddy's is a good example of the success that copycat drug makes have achieved and the threats they are posing to the lucrative profits of brand name medicines.

India showed two years ago it could take on the giants on their home turf when Dr. Reddy's won the right to hawk generic versions of Eli Lilly's best-selling antidepressant, Prozac in the U.S. markets. Since then, Indian drug makers have become more aggressive.

With their new strategy, Indian generic drug makers do not even challenge a patent directly, rather they argue that their product doesn't infringe on patent protection because it is made of different ingredients, even though it has the same effect as a branded drug.

Indian pharmaceutical companies are also leaving other countries behind in the race to grab a share of the huge U.S. market. In the first six months of the current calendar year, Indian companies filed 58 Drug Master Files (DMFs) -- nearly double the number of DMF filings in the corresponding period last year and more than the combined filings from the next five countries. This is in sharp contrast to the situation a few years back. In 2000, Indian companies had 40 DMF filings, second to 44 by Italian companies.

DMFs are submissions to the FDA providing information about facilities, process, or ingredients used. Although not mandatory, most manufacturers file DMFs as the information contained may be used to support an Investigational New Drug Application (IND), a New Drug Application (NDA), an Abbreviated New Drug Application (ANDA), or an export application.

This increasing capability of Indian companies to access the U.S. market is also evident in clearances they have managed while keeping the traditional generic drug makers out. During the past two decades generic drug makers with U.S. operations have typically sought permission from the USFDA to market knockoffs of a branded drug after all patents had expired. In all, Indian companies have received either judicial or administrative permissions to sell 87 generic drugs in the U.S. over the last two years and 68 more are awaiting approval. "It's a great time for the Indian pharmaceutical industry," exults G.V. Prasad, CEO of Dr. Reddy's.

One reason Indian companies are doing so well in America is that they have learned to exploit U.S. patent laws that two decades ago were amended to allow for the sale of copycat pharmaceutical products. Beginning in the early 1970s, the U.S. government encouraged manufacturers to make duplicates of big drugs and sell them cheaply in the country. In the mid-1990s, Indian companies searching for overseas revenue streams began pushing into the U.S., where chronically high prices for prescription drugs created a ready market for generics. Dr. Reddy's, for example, was one of the hundred companies in the United States that over the years knocked off everything from the antibiotic Augmentin to the ulcer medicine Zantac. The company now generates one-third of its sales in the U.S.

However, under pressure from global drug makers, the federal government is reportedly planning to begin upholding international drug patents in 2005, forcing Dr. Reddy's and Ranbaxy to find new ways of making money. Still, Indian drug makers may be undaunted and are even willing to fight aggressive litigation. "We want to get into the market early," says G.V. Prasad of Dr. Reddy's. If a generic company simply waits for a patent to expire and various copies hit shelves, competition gets tough and margins slender, "So, litigation is the necessary cost of doing business," says Prasad.

Wednesday, 05-Nov-2003 8:50AM PST Story from United Press International
Copyright 2003 by United Press International (via ClariNet)