News May 2007

Generic Drugs: Hard To Swallow

Innovative pharma companies are adopting increasingly aggressive strategies to prolong the life of their product patents and keep generic players off the market. The drug giant Johnson & Johnson has filed a law suit against Sun Pharma’s subsidiary and generic firms Barr Pharma and Par Pharma to prevent them from selling a generic version of its blockbuster pain killer Ultracet.

If the court rules in favour of the pharma major, the three generic company may be constrained to withdraw their generic versions from the market, estimated at over $300 million. This would come as a blow to the domestic pharma major, as Ultracet accounts for an estimated $10-15 million or over 10% of its US subsidiary’s revenues.

In an attempt to keep generic versions off the market, Johnson & Johnson filed a fresh patent on Ultracet, and filed a law suit against the three generic companies claiming their products infringe its new patent.

“This is a very uncommon strategy for an innovative company. With this move, Johnson & Johnson is setting a precedent,” said Anoop Narayanan, partner, Majmudar & Co, a leading international law firm in Mumbai.

Sun Pharma had scored its first victory of sorts generic drugs market when it successfully challenged Johnson & Johnson’s patent on Ultracet in 2005. After receiving a favourable summary judgement by a US district court, Sun Pharma’s subsidiary, Caraco Pharma, had launched its generic version of the drug major’s pain killer in December 2005.

“For Ultracet, we compete in a market that has two other generic players, so the downside risk to Caraco is limited,” said Sun Pharma spokesperson. Analysts peg price erosion for generic versions of Ultracet at around 70%, which is significantly lower than that of other generic drugs , usually ranging between 85% and 95%.

“The patent holder has filed a new patent, got this listed in the orange book and sued all the three generic companies, but we believe our product is non infringing,” said Sun Pharma spokesperson.

Par Pharma and the $8.4-billion Israeli generic company Teva are also present in the market. Par Pharma was the first company to challenge Johnson & Johnson’s patent and to launch a generic version of Ultracet in April 2005 while Teva was designated by Johnson & Johnson as an authorised generic later the same month.

Johnson & Johnson also sued Barr Pharma, which received approval to market a generic of Ultracet. However, litigation with Johnson & Johnson is still pending and generic firm chose not to launch the product ‘at risk’.

Source: http://economictimes.indiatimes.com/