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Pharma – overdose of copying

In the initial formative years, pharma companies in India worked on copying branded drugs through reverse engineering and sold many drugs as generics.  This helped several Indian companies like Ranbaxy and Dr Reddy’s Laboratories build large volumes and profitable operations. They have been able to sell many branded products of the west as generics at low prices in India. For years, Indian pharma companies flourished.

Disappointingly, these did not focus simultaneously on research to formulate new molecules and new drugs, which are admittedly expensive.

Large pharma companies in the US and Europe were affected by such extensive copying and violation of intellectual property rights. They  spent

$ 500 million and more for discovering a new drug over a decade. The costs were admittedly high and involved extensive research over multi disciplines. The IPR regulations were also strictly followed in the US and European countries. The sanctity of IPR was respected by the leading drug companies.

Understandably, these companies have been deeply affected by the mindless copying of their prized products.  They adopted a three-pronged strategy to hit back:

•    The first one was to buy outright large Indian companies like Ranbaxy.

•    The second was to file a number of court cases on violations of FDA Rules of USA in regard to quality and ethical issues. These impacted on the operations of companies including Ranbaxy and Dr Reddy’s Laboratories.

• The third was to buy out increasing proportion of shares of companies with a view to influencing policies from within.

These strategies have cumulatively impacted severely on several Indian drug companies. Apart from Ranbaxy and Dr Reddy’s Labs, Orchid Pharma has passed control to Hospira, USA. Other companies that have been growing fast like Aurobindo Pharma are also under threat.

Leading scientist Dr G Thyagarajan, who has made rich contributions to the Indian pharma and chemical industries, holds the Indian pharma companies responsible for this sad state of affairs. He points to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines, said GT.


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