Natco Pharma’s Successful Generic Challenge Puts Pressure On MNC Pharma Companies

After the domestic pharma company Natco Pharma was allowed a compulsory license to manufacture and sell the generic version of Bayer’s anti-cancer drug, Nexavar, multinational pharma companies (MNCs) seem to have gone defensive to protect their patented big ticket drugs. The Wall Street Journal has reported that Roche Holding AG, a giant MNC has cut the prices of two cancer drugs in India from the year 2013.

Roche has disclosed these two drugs as Herceptin and Mabthera used in cancer treatment. Both these drugs are sold at the price of about USD 3,000 to USD 4,500 a month per patient. At this time it is not clear how much of a price discount would be given. These drugs would be rebranded to secure brand equity in the original innovator’s drugs. This will also ensure that the wholesalers do not buy this drug in India and sell at higher prices overseas. The drugs will be packed in India by domestic company Emcure Pharmaceuticals.

The new drugs are subject to regulatory approval from the FDA. This move can also be seen as a defensive tactic by Roche to defend the patent of Herceptin which will eventually expire in 2014. Natco’s case was heavy against Nexavar of Bayer and hence we believe that Roche would have landed in the same place had it not reduced the drug prices. This can also be seen as an opportunity to Indian generic manufacturers which will now hunt for more drugs which are expensive and not manufactured in India. There is also ample scope to believe that the MNCs will also reduce the prices of the expensive drugs and will try to get the drugs manufactured within India to reduce the manufacturing, packaging and logistics costs.

The cancer market in India is growing and such an activity will be seen beneficial for the patients. The generic opportunity will help the Indian companies to use the existing manufacturing capabilities and also gain market share by providing low-cost cancer drugs.