Unique deal gives desi pharma companies slice of cancer drug’s $8 billion US pie – Times of India
MUMBAI: A blockbuster cancer drug in the US with annual sales of over $8 billion may just become a win-win for all stakeholders – the innovator, domestic generic companies as well as patients. This is in the wake of a ‘unique’ patent settlement where US major Bristol Myers Squibb is “sharing the pie” of drug Revlimid with Indian generics, including Natco and Dr Reddy’s.
Both the Indian pharma companies could potentially mop up around $300 million together in sales of generic Revlimid in the US in the first year, analysts say, adding the total opportunity may be bigger. For the innovator and generics, it means a huge upside in revenues, and for patients possibly a more affordable treatment with the entry of generics.
In recent years, this is one of the first such lucrative opportunities in the US for Indian companies. Price erosion in the US generics market, a key driver of Indian pharma’s growth, has been at an all-time high and has impacted operating margins of companies significantly. Around 15 companies have filed for marketing approval with the US Food and Drug Administration for generic Revlimid, but first-mover advantage is with Natco, they added.
The patent dispute on Revlimid of Celgene, a subsidiary of Bristol Myers Squibb (BMS), was settled with Indian generics in separate cases over the last few years. Details of the deals have largely been confidential. Typically, the entry of lower-priced generics, with the drug going off-patent, could siphon off as much as 90% of their sales. In this case, however, the patents covering Revlimid will expire in 2027.
According to the settlement between the sides, since the generic volumes are restricted, price erosion may be limited to 20-25% in the first year, an industry expert told TOI. Under the Natco-BMS deal in December 2015, the domestic company will launch a volume-limited amount of the generic drug in the US.
Both the Indian pharma companies could potentially mop up around $300 million together in sales of generic Revlimid in the US in the first year, analysts say, adding the total opportunity may be bigger. For the innovator and generics, it means a huge upside in revenues, and for patients possibly a more affordable treatment with the entry of generics.
In recent years, this is one of the first such lucrative opportunities in the US for Indian companies. Price erosion in the US generics market, a key driver of Indian pharma’s growth, has been at an all-time high and has impacted operating margins of companies significantly. Around 15 companies have filed for marketing approval with the US Food and Drug Administration for generic Revlimid, but first-mover advantage is with Natco, they added.
The patent dispute on Revlimid of Celgene, a subsidiary of Bristol Myers Squibb (BMS), was settled with Indian generics in separate cases over the last few years. Details of the deals have largely been confidential. Typically, the entry of lower-priced generics, with the drug going off-patent, could siphon off as much as 90% of their sales. In this case, however, the patents covering Revlimid will expire in 2027.
According to the settlement between the sides, since the generic volumes are restricted, price erosion may be limited to 20-25% in the first year, an industry expert told TOI. Under the Natco-BMS deal in December 2015, the domestic company will launch a volume-limited amount of the generic drug in the US.
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