business

Updated: Aug 07, 2018 09:19 IST

With pharmaceutical giant Pfizer set to lose the patent of its blockbuster drug Viagra in the US, Indian companies are gearing up with copycat versions of the iconic blue pill, hoping to tap into a lucrative market.

Pfizer’s patent for the formulation of Viagra, used to treat impotence in men, ends in the US in 2020. This will open the door for Indian companies to target the nearly 5 crore Americans who suffer from erectile dysfunction in what is India’s largest market for exports of medicines.

Seven Indian companies have already secured the required permissions. They are among 15 companies worldwide that have been granted approval by US health watchdog the Food and Drug Administration, to produce sildenafil citrate, the formulation patented as Viagra.

The Indian companies in the fray to sell the blue pill are Rubicon Research, Hetero Drugs, Macleods Pharma, Dr.Reddy’s, Aurobindo Pharma, Torrent Pharmaceuticals and Ajanta Pharma.

Could spark massive price crash in the US

The Indian companies are working on strategies that could bring down the price of Viagra in the US market by almost 99 per cent.

The pill costs about $65, or over Rs 4,400, in the US. Pfizer had itself launched a generic version of the drug at half of the price in 2017. Even this, experts believe, won’t match the price that Indian firms could end up offering.

The Mumbai-based Macleods Pharmaceuticals, which started medicinal exports to the US in 2012, sells a desi version of Viagra in India as Macsutra for Rs 58 per tablet.

Ajanta Pharma, a $1.6 billion publicly-listed firm, sells its version in India under the brand name Kamagra for Rs 32 a tablet.

The Indian entry could dent Pfizer’s stranglehold on the drug. Its global sales from just Viagra touched $1.685 billion, over Rs 10,900 crore, in 2014. According to an American company, Transparency Market Research, the global erectile dysfunction drugs market was valued at $4.35 billion in 2016

Niteesh Srivastava, vice president, Macleods Pharmaceuticals, admitted that the entry of Indian firms in the US market could spark a price war. “Lower pricing is the only way to gain preference. Hence, a price war is certain,” he says.

Srivastava added that both known and lesser-known companies will have certain advantages. “While lesser known or relatively smaller firms will be able to crash prices due to less overhead expenditures, pharma giants will already have a better hold on the pharmacy benefit managers (PBMs) in the US to reach the desired negotiations,” he said.

“It is an opportunity for Indian drug makers to cash in on their R&D and pricing strength and get into the US market for Viagra, which has largely been cartel led so far due to patent and policy regulation,” said Sougat Chatterjee, president of TFPL, a global research consulting firm.

The Indian firms, however, have had to contend with rising FDA license fees. The FDA has increased the fee for processing drug applications by over Rs 65 lakh to Rs 1.1 crore for the fiscal year 2018, against the earlier fee of Rs 45 lakh.

“With such investments to gain approvals, every player will come on the ground with a surprise strategy to reap long-term results,” Srivastav said.

But they will be aided by an important factor. After the United Kingdom’s move to approve Viagra as an OTC product, it is expected that US FDA would also follow the suit considering the highly motivated patient population.

“Many among these seven companies have been waiting to get into the US OTC market considering its sheer volume. Now, they are likely to have the opportunity,” Chatterjee said.

The PBM route

In the coming months, Indian manufacturers are expected to tie up with the pharmacy benefit managers (PBM) in the US.

The PBMs, according to the American Pharmacists Association, are “primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims.”

In 2016, PBMs managed pharmacy benefits for 26.6 crore Americans. “These PBMs operate inside of integrated healthcare systems as part of retail pharmacies, and as part of insurance companies. The success of Indian firms will depend on their relationship and networking with these pharmacy chains,” said Ashok Madan, executive director, Indian Drug Manufacturers’ Association, a lobby representing over 1,000 pharma companies in India.

Most of the companies, however, remained tight-lipped about their plans. While Dr. Reddy’s Laboratories said its spokesperson is traveling, emails sent to Cadila Healthcare, Torrent Pharmaceuticals, Rubicon Research did not elicit a response.

An official from Ajanta Pharma who requested anonymity said, “We had just two US approvals until 2014. In 2016, we had nine new approvals. We are upping our ante to expand the business in the US. Whenever a drug loses a patent, it is a big opportunity. However, we are still working on the strategies.”