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Advantage India: Growth Pills Abound For Pharma Companies

by Medindia Content Team on June 26, 2006 at 5:20 PM

Advantage India: Growth Pills Abound For Pharma Companies
It's advantage Indian pharma companies and the needy patients who would have to fork out much less to purchase life-saving drugs, with global pharma giants like Merck and Pfizer losing their patent on drugs commanding multi-billion annual sales.

Domestic pharma majors Ranbaxy and Dr Reddy's Laboratories are being touted as major beneficiaries to tap on a multi-billion dollar sales vacuum created by the patent expiry of two biggest blockbuster drugs in the US -- cholesterol- cutting drug Zocor and antidepressant Zoloft -- within the span of a week.
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Merck's patent for Zocor that contributed USD 4.4 billion in the company's 2005 sales expired on June 23, while Pfizer loses its patent for Zoloft, which totalled USD 3.3 billion in 2005 sales, on June 30.

When a company loses its exclusive patent for a branded drug, market opens to a host of generic drugmakers that leads to a drop of nearly 80 per cent in the drug's price, which results in a major gain for consumers as well as the makers of generic version of these drugs.
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While analysts expect good value addition in share prices of DRL and Ranbaxy on the back of patent related global news flow going forward, another pharma major Cipla has already outperformed the Sensex since June 14, when the 30-share barometer index had plummeted to its lowest level in past few months at 8,799.01.

Cipla has gained 17.91 per cent since June 14 as against a gain of 16.48 per cent in Sensex. Ranbaxy on the other hand rose 11.01 per cent and DRL 8.51 per cent during the same period.

Source:PTI News
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