labels: pharmaceuticals, dr reddy's laboratories , merck & co
Merck allows Dr Reddy's to sell authorised generics of blockbuster drugsnews
02 February 2006

In a strategically significant deal for the Indian pharma industry, Dr. Reddy's has entered into an agreement with Merck to sell two of the latter's blockbuster drugs as authorised generics once they go off-patent.  This is the first time an Indian generic company is entering into a tie-up with a global major to launch authorised generics.

Till now generic companies, including Indian majors like Ranbaxy and Dr. Reddy's, have been mounting patent challenges against the pharma multinationals. These multinationals usually attempt to seek extensions after the expiry of the initial patent as in the case of Pfizer's Lipitor with Ranbaxy challenging the patent extension.

If successful, the generic company which is the first to file the challenge would get 180-day market exclusivity for its generic version after the patent expiry under US laws. However, the original patent holder can also market a generic version of its own drug even during the 180-day exclusivity period.

The patent-holder can also allow another generic company to launch an authorised generic version. This provision significantly reduces the potential gains to generic companies from patent challenges as there would be a competing generic product even during the exclusivity period.

Under the deal with Merck, Dr Reddy's would launch generic versions of Merck's Zocor and Proscar, which are going off-patent in the US this calendar year. The deal would be applicable only if a generic company gets 180-day market exclusivity.

Zocor is a statin or anti-cholesterol drug with annual global sales of close to $5 billion. This is the second-largest selling drug after Pfizer's Lipitor, another statin. Ranbaxy has already filed a patent challenge for Zocor.

Proscar is a drug used to treat enlarged prostate gland with annual sales of over $600 million. Israel's Teva is expected to be the first generic company to file a challenge for this drug.

Dr. Reddy's closed at Rs1,179 (up 5.18 per cent) on the NSE yesterday.

also see : Dr Reddys Laboratories enters into agreement with Merck

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Merck allows Dr Reddy's to sell authorised generics of blockbuster drugs