India's Business Standard, citing brokerage reports, said the domestic drug company Lupin has raised the price for diabetes drug Fortamet in the U.S. by 200%, though that still puts it below rival Valeant Pharmaceuticals ($VRX).
|Lupin managing director Nilesh Gupta|
According to the newspaper, the price hike could mean an extra $100 million for Lupin, which competes with Valeant's Glumetza tablets in that market, which recently rose 900%.
India, a major generic drug exporter to the U.S., has seen the press avidly follow the controversy over a move by Martin Shkreli and his biotech, Turing Pharmaceuticals, last weekend that jacked up prices of the 62-year-old drug Daraprim from $13.50 a pill to $750.
Indeed, other reports have suggested that such apparent price gouging in the U.S. could boomerang in India's favor by increased demand for cheaper copies, or conversely bring renewed pressure on pricing for some products.
"Unlike India, the U.S. is a free market for pharmaceutical pricing and there is no restriction or cap on prices of either generic products or new medicines," the Business Standard report said. "However, last October, the U.S. legislature had initiated an inquiry against 14 companies for 'abnormal' price rises. These included three from India--Sun Pharmaceutical, Dr. Reddy's and Cadila Healthcare."
A call to Lupin by FiercePharmaAsia did not bring comment.
A brokerage analyst in India however commented to the Business Standard on the Lupin hike.
"Lupin's price hike has come after a huge price increase in competing product Glumetza. After the hike, Fortamet is still 75% cheaper," Sarabjit Kour Nangra, vice president at Angel Broking, said in a note to investors seen by the Business Standard.
She estimates Lupin's sales from the product at around $43 million and with the rise, it should earn $70 million to $80 million, the newspaper said.
Surajit Pal, analyst with brokerage Prabhudas Lilladher, estimates the price rise could double the sales of this diabetes drug to $100 million, the Business Standard said.
Lupin has sold generic Fortamet in the U.S. since 2011.
Japanese drugmaker Shionogi had secured an injunction against the sale, but Lupin resumed it in April 2012. Lupin has rights to sell generic Glumetza from February 2016, following a settlement with Santarus in 2012. The diabetes drug was sold by Santarus to Salix Pharmaceuticals in 2013, which was bought by Valeant earlier this year.
Mylan ($MYL) also has rights to sell a generic version of Fortamet extended-release metformin after reaching an agreement over patent litigation in 2013.
- here's the story from Business Standard