Compiled By:
Neha Gupta
Shubham
Kaushik
Umesh Gupta
Shruti Garg
Kapil Sharma
Shikha Sinha
OBJECTIVE
To enter into a strategic alliance
with Pfizer for its medicine,
Lipitor, going off patent.
Q. What is Patent?
A patent is a legal monopoly granted for a limited time to
the owner of an invention. It empowers the owner of an
invention to prevent others from manufacturing, using,
importing or selling the patented invention. Patent Act,
1970 as amended in the years 1998 and 1999 along with
Patent Rules, 1972 govern patents in India.
Registration is a prerequisite for patent protection and the
protection granted is territorial in nature i.e., patent
granted in a country will give the owner of the patent right
only within that country.
Branded Drug vs. Generic Drug
• A generic drug is the bio-equivalent version of a brand name drug.
• Certified by the U.S. FDA, means a generic drug has the same dosage form,
safety, strength, route of administration, quality, performance
characteristics and intended use as the branded version of the drug.
• Typically sold at substantial discounts from the branded price.
Generics may differ slightly from brands in regards to inactive ingredients.
• The U.S. FDA states that an AB rated generic product can be interchanged
with its branded counterpart.
• The U.S. FDA regulates all generic products under strict guidelines, requiring
the same testing as the branded product
Our Mission
“To become a Research-based International
Pharmaceutical Company”
Vision - 2012
Achieve Significant Business
In Proprietary Prescription Products
With a Strong Presence
In Developed Markets
Aspirations - 2012
Aspire to be a $5 Billion Company
Become a Top 5 Global Generics Player
Significant Income from Proprietary Products
World’s largest economy
BUT..
Current US Fiscal Deficit: $1.3 trillion
Social security cost of the USA has contributed to 20.8%
Social Security is currently the largest social insurance
program in the U.S., constituting 37% of government
expenditure and 7% of the gross domestic product
and is currently estimated to keep roughly 40% of all
Americans age 65 or older out of poverty.
Total healthcare spending of the US reached up to US$
2.5 Trillion in 2009
Government emphasizing on minimizing the healthcare
spending by using generics drugs
Vast opportunity for INDIA
US generics market is anticipated to grow at a CAGR of
around 8.8% during 2010-2013
(Source: Article published in Bloomberg, dated-April,2010)
Pfizer
World's largest research-based pharmaceutical
company
Huge network of approximately 85,000
colleagues in more than 90 countries
Treat and help prevent disease for both people
and animals.
Matter of proud and honor for any company to
enter into an alliance with a world renowned
pharmacy company.
Lipitor
World's most-prescribed medicine which
lowers cholesterol, the risk of stroke, heart
attack, or other heart complications.
Best selling drug in pharmaceutical history
with global revenues of $13.6bn.
Single-handedly driven the overall revenue
margins of the cardiovascular segment.
Repeatedly maintained steady growth over
the past 5 years.
FDA (Food and Drug
Administration)
The Food and Drug Administration (FDA or USFDA) is an
agency of the United States Department of Health and
Human Services, responsible for protecting and
promoting public health through the regulation and
supervision of pharmaceutical drugs.
It includes NDA and ANDA.
NDA - New Drug Application
ANDA - Abbreviated New Drug Application
After going through laws of FDA -
An ANDA is submitted for the generic version
(Atrovastatin) of Liptor drug providing the FDA how our
generic version is similar to the patented drug.
Our generic version is having same chemical
composition (active and inactive ingredients) as the
parent drug, and is much less costlier than the branded
drug.
FDA’s Counter Attack on Ranbaxy
The US Food and Drug Administration has asked Indian
pharmaceutical major Ranbaxy Laboratories to
immediately assess the manufacturing practices at its
plants that make drugs for the American market, saying
the company has failed to adequately address the concerns
raised by it earlier, those are –
Deviations in cGMP practice including failure of a
batch of manufactured formulations or any of its
components to meet its specifications.
Lack of laboratory control mechanisms and documented
the execution of laboratory control functions at the time of
performance.
Non-compliance with appropriate specifications,
standards, sampling plans.
Non-Compliance with test procedures designed to assure
that drug products conform to appropriate standards of
identity, strength, quality, and purity.
Inadequate number of qualified personnel to perform and
supervise the manufacture, processing, packing, or holding
of each drug product.
Improper equipment, post-marketing violations.
RANBAXY’s Defense against FDA
Allegations
The drug regulators of the UK, Australia and other
developed countries do not have a problem with Ranbaxy's
drugs. About 90% of the regulations are the same. Even the
deficiencies FDA has pointed out are small process violations.
To date, the FDA has no evidence that these drugs do not
meet their quality specifications and has not identified any
health risks associated with currently marketed Ranbaxy
products.
Ranbaxy USA unit is fulfilling all the quality standards and
successfully marketed 63 generic drugs earlier also.
Some of the allegations are in Court and nothing has proved yet.
So the FDA grants license to Ranbaxy with the clause “Company
must provide truthful and accurate information in their marketing
applications” .
“As the American public expects and deserves no less”
WHY RANBAXY?
Ranbaxy has world-class manufacturing facilities in 7 countries
namely Ireland, India, Malaysia, Nigeria, Romania, South Africa and
USA.
Ranbaxy have a 100% subsidiary in US under the name of –
Ranbaxy Pharmaceuticals Inc. (RPI)
Ranbaxy is one of the fastest-growing pharmaceutical companies in the
U.S. The Company is selling its products in over 100 countries.
A world-class generics, branded generics and a major supplier of its
range of Active Pharmaceutical Ingredients for pharmaceutical products
of companies worldwide.
The Company is driven by its ambition to achieve US $5 Bn Sales by
2012 and be amongst the top five generic players worldwide.
Ranbaxy has:
A history of stringent compliance and outstanding quality.
U.S. FDA inspected and approved facilities.
63 generic approvals from FDA in U.S.
Expertise in Rx anti-infectives, cardiovascular, analgesics,
NSAIDs, anti-allergy, CNS, and gastrointestinal.
Expertise in OTC analgesics, cough/cold, allergy, laxatives,
antidiarrheals and acid reducers.
Ranbaxy ranks 9th in generic company worldwide, 2nd in generic
business in USA and the 52nd in Egypt (of 600 companies
working in the Egyptian Pharma Market.
Strength and vibrancy in advanced developmental research for
pharmaceutical substances, advanced intermediates, delivery
systems, fermentation, biotechnology and new drug discovery.
Expertise in bulk pharmaceuticals, fine chemicals and
diagnostics.
Ranbaxy represents a steadfast dedication to pharmaceutical
excellence.
Present in Top 10 markets constituting 82% of the
total pharmacy market
Source: IMS Health Midas MAT Dec 2008, Graph not to scale
STRATEGIC
ALLIANCE
For Lipitor, when manufactured by Ranbaxy, the cost of 20 mg, i.e.,
1000 tablets is $ 2720.
The generic version, Atorvastatin which will be manufactured by
Ranbaxy will incur a gross revenue of $ 540 which is 80% less than that
of the original drug (Lipitor).
Gross revenue $ 540 For a lot of 1000 tablets
(-) Tax (30%) $ 162 Foreign companies with US income
$ 378
(-) Excise Tax (2.3%) $ 8.69
$ 369.31
Exempted under Section 505(j) of
(-) Pharmaceutical Tax NIL the FFDCA for generic drug
$ 369.31 manufacturing.
(-) Profit (15%) $ 55.39
$ 313.92
COST OF PRODUCTION
Distribution Cost *
Manufacturing Cost **
Marketing Cost
60% - 188.35 $ 30% - 94.18
10% - 31.39
* The distribution cost is approx. 17% of the gross revenue billed. Hence, we
are negotiating (with Pfizer) for a 15% - 18% share of gross revenue for a lot
of 1000 tablets distributed by them.
* Manufacturing Cost includes the cost of active ingredient, which is $ 58.
LETTER OF INTENT
1) Venture Objective:
To develop a strategic alliance for distribution of Atorvastatin by Pfizer.
2) Contribution of both parties:
Drug is manufactured & marketed by (Ranbaxy) us.
Distributed by us & Pfizer both.
3) Area of contribution to be negotiated:
Distribution & Revenue share
4) Major Risks:
a) US FDA Approval
We have approval from ANDA which is the body of FDA governing
generic drugs.
b) Competitors
We have a competitive advantage as we have successfully marketed 63
generic drugs.
5) Termination & Conflict Resolution
Termination: termination will be after 2 years from the date of
commencement.
Deal Successful