Generic Drug Firms Shrug off Patent Setbacks

17 October, 2005

Generic drug manufacturing companies have had a poor run since 2004 in major litigation challenging patents in international courts. But analysts feel that the recent reversals are unlikely to deter these companies from reducing the number of patent challenges they file. This is because if they win even a few of the many cases they file, it will bolster their bottom lines significantly.

During the period, as many as 35 "best selling" drugs of traditional pharma companies were scheduled to go off-patent. The current sales value of these drugs is estimated to be in the range of $35 billion. Generic drug refers to a copy of an original product whose patent has expired.

Firms such as Ranbaxy, India's biggest pharmaceutical company and manufacturer of erectile dysfunction (ED) generic drug Caverta are fiercely targeting the large domain of off-patent drugs. Patent litigation has now become an integral part of the global generic drug business, because of extremely high stakes. Ranbaxy has been spending about $20 million annually for litigation in patent challenges. Analysts said generic drug manufacturers would not shy away from forking out money because the gains in case of a win would be too big.

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