Indian Ingenuity in the Pharma industry – not just generics

Eli Lilly and Glenmark announced last week a deal in which Lilly will license from Glenmark the rights to a new set of molecules (a portfolio of TRPV1 antagonist molecules, including a clinical compound, GRC 6211.)

The world has for some time been well aware (and impressed) with the performance of India’s top ‘generic’ companies. In an interesting example of taking a generic IP Strategy to the next level, Lupin entered into two recent IP portfolio sales to Servier earlier this year in relation to Perindopril. The Glenmark-Lilly deal is at another level – this time the originating research on a new subclass of molecules.

The buzz from this deal (finally) seems to be reinforicing the strength of Indian ingenuity in the pharmaceutical sector outside the ‘pure-play generic’ genre. For those who may be unaware, Glenmark is not the only leading Indian pharmaceutical company with multiple new compounds in late clinical trials.

The deal also clearly reinforces a point that I have been making for some time – that the distinction between ‘generic’ and ‘brand’ companies is an outmoded way of thinking. A company’s strategy for a given molecule is not dictated by the company’s historical business model, but the entire context of the situation.

What’s interesting for India as its pharmaceutical companies develop more new compounds, will be the extent to which there is pressure to repeal legislation such as the much debated section 3(d).


About The Author

8 thoughts on “Indian Ingenuity in the Pharma industry – not just generics”

  1. Great post Duncan,

    As for whether there would be pressure for repeal of section 3(d) by indian companies, the question you have to ask is: how important is the indian market for indian generics?

    ranbaxy gets about 85% of its revenues from the foreign markets. in other words, so long as indian companies can exploit the markets of the US and EU, why would they be concerned with the shape of the indian patent regime? similarly, how important is the indian market for eli lilly–in other words, so long as glenmark patents in the US, EU and Japan, Lilly would license from them. In such a case, would the indian market and the indian patent regime really matter?

  2. i have to qualify the above comment: the one place where the indian market may matter (and therefore the shape of the patent regime) is for neglected diseases and diseases that are specific to india (and for which the US/EU markets are negligible).

  3. Thanks Shamnad
    Stepping back for a minute, I don’t think that anyone would disagree that the value of an IP portfolio is lower if it has a shorter monopoly period in even one country.
    As you mentioned back in August (, a number of Asia-Pacific Countries are following India’s lead with sections similar to 3(d). (The Philippines have already done this.)
    The question then for India is to work out how to make this delicate balance between incentives for cheaper medicines, and providing sufficient incentives to its own (extremely clever) pharmaceutical companies to reap the rewards that await those who can fill the currently troubled pharmaceutical pipeline.
    Both opportunities promise greater prosperity for India.
    As India continues to prosper, the sheer population will mean that it will matter a great deal commercially one day – what legislative legacy will there be to deal with then?

  4. Shamnad – great points as always.
    This obviously isn’t only about 3(d) per se, but the whole policy approach.
    Perhaps less than 10 years, but fair enough. Even in 10 years, though, the patents being filed (or not filed) now will just be coming into play in Glenmark and Lilly’s attempts to monetize the R&D and resulting IP. So, waiting 10 years will mean another 10 or so before the effect will be seen. I don’t know – is that ok?
    I think getting patents was pretty important to Glenmark and Lupin in their recent deals. The IP owner side of the game is very different.
    I guess one question is how should Glenmark react when Sandoz or Teva makes and sells their new molecule from an Indian plant in India and the countries which will allow import without infringement?

  5. Great point about sandoz and teva Duncan. Lets work through a hypothetical Duncan to figure out how cost-benefit analysis would work here:

    1. patents in favour of glenmark in 2007: 2 (hypothetical)
    2. US/EU markets: 80% of revenue and market
    3. patents in the US and EU (hypothetical gain: “X”)
    4. No patent in India: hypothetical loss (“Y”)
    5. compounds being worked upon in india in 2007 for which there are patents (of others’): 10+ (hypothetical)
    6. Sales from generics from point 5 above (“Z”)

    so is “X” + “Z” going to matter more for Glenmark or is the loss of “Y” going to matter more for it?? 10 years is a conservative estimate. As for Lilly, similarly, wouldnt it anyway license from Glenmark, so long as they have rights covering the US, EU and Japan (main markets)–enough profits in there!!

  6. Yes Duncan,

    Loss of patent protection in India could mean a loss of revenues for “X”, an Indian pharmaceutical company, since Y and Z (other Indian pharma companies) would now be free to manufacture the same drug in India. But remember that X will still be able to make considerable monopoly profits through patent protection in its main markets (US, EU and Japan). More importantly, its losses in India through a lack of patent protection for its new drug may not amount to much when compared to the losses resulting from the presence of a patent regime in India i.e. if patents were granted to Y and Z for other drugs in India. Remember, X is primarily a generic company that has had a free run thus far (till 2005). Freedom to manufacture and sell a variety of drugs in India and also sell to other countries (where there are no patents) may mean much more in revenues for X. So perhaps on the balance, loss of patent protection in India may be relatively insignificant for X??”

    As for the increasing domestic revenues, you’re right–the market is growing. But so are the international markets. In fact, most Indian companies seem to be getting a higher relative value from foreign markets (the foreign share is increasing much more relative to indian market share)–and my own guess is that this will continue for the next 10 years or so. In which case,. shouldn’t we revisit this issue only 10 years later and not have a patent regime that will perhaps help after 10 years!! Too much of forward planning, wouldn’t you think.

    Most importantly, most indian companies are in favour of a very high threshold under section 3(d)–clearly, they know what they want. So perhaps they’ve done a cost benefit analysis and concluded that getting “patents” is not that important for them??

Leave a Comment

Scroll to Top