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Business
07 Aug 2018

As Pfizer's Viagra patent ends, Indian firms prepare for dominance

What Viagra patent's end means for pharmaceutical companies

Viagra, the global leader in treating impotence in men, might soon be dethroned, as pharmaceutical giant Pfizer loses its patent for the drug in the US in 2020.

It is a golden chance for Indian companies, which are looking to tap into a lucrative $4.35bn market. Seven have already secured permissions.

Customers might lose the iconic blue pill, but heavy price drops are in the offing.

In context

What Viagra patent's end means for pharmaceutical companies
A brief history of the little blue pill's birth

History

A brief history of the little blue pill's birth

Pfizer chemists created a compound called sildenafil citrate in 1989, which they thought was a treatment for high BP and chest pain.

It didn't produce desired results during testing, but they discovered it inhibited an enzyme that hampers erections.

It was patented in 1996 and started going on sale in 1998, becoming the first oral treatment for erectile dysfunction in the US.

Icon

Viagra didn't revolutionize just the industry, but the society too

Viagra, the "little blue pill," was more than a medicine: it changed the narrative around erectile dysfunctions and made it a commonplace term.

Many aphrodisiacs started naming or modeling themselves after Viagra.

Pfizer's patent outside US ended 2012, but in the country, it continued after Pfizer settled litigation, halting Mylan and Teva's generic-medicine production plans till December'17, when it released its own generic version.

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Advantage

Indian companies in US will have one significant advantage

India's Dr. Reddy's, Rubicon Research, Macleods Pharma, Hetero Drugs, Aurobindo Pharma, Ajanta Pharma and Torrent Pharmaceuticals are now targeting the 5cr-strong American market, their largest for pharmaceuticals export.

With their entry, the pill that costs $65 in the US will become drastically cheaper: Macleods sells 'Macsutra,' a desi version, in India at just Rs. 58.

Ajanta sells 'Kamagra' at even lower, for Rs. 32.

Competition

It's a matter of do-or-die for Indian firms

Both big and small companies will have certain advantages, said Niteesh Srivastava, VP, Macleods.

The former "will have a better hold on pharmacy benefit managers (PBMs) in the US," while the latter "will be able to crash prices due to less overhead expenditures."

Efforts to dominate will be boosted by the fact that the FDA hiked license fees from Rs. 45L to Rs. 1.1cr in FY18.

These two key factors will determine manufacturers' success

Factors

These two key factors will determine manufacturers' success

Two key factors will be connections with PBM, who are "responsible for developing and maintaining formulary, contracting with pharmacies, negotiating discounts and rebates with manufacturers, and processing and paying prescription drug claims."

In 2016, PBMs managed pharmacy benefits for 26.6cr Americans.

Pharmaceutical companies are also awaiting approval for OTC sales of sildenafil in the US; the UK started OTC sales this year.

Pfizer

For Pfizer, it marks the end of an era

The Indian companies will have to take their game to the top, as they will be in competition not just among each other, but with eight other companies worldwide, which have already been approved by the FDA for selling sildenafil.

But the writing's on the wall for Pfizer, who will certainly lose its monopoly: in 2014, it earned Rs. 10,900cr from sales of just Viagra.

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