It's no big secret that international drugmakers are miffed at India. Revoking a few drug patents and overriding others will do that. But India's own pharma companies have their own beef with government policy--namely government pricing policies.
And with price caps set to crimp profits on a host of standard meds at home, Indian drugmakers are even more keen on the U.S. market. Dependent upon it, even.
Just look at a couple of companies' latest quarterly results. Ranbaxy Laboratories saw its profits crater year over year now that its exclusive hold on the Lipitor generics market has come to an end. On the other hand, Lupin grew U.S. sales by 49% for the period, and that's one reason for its surge in profits--and resultant surge in stock price today as results were announced.
Lupin now derives 45% of revenues from the U.S. market. Ranbaxy already generates 50% of its sales in the States, Reuters notes. And Indian companies account for one-third of new applications for generic drugs in the U.S.
"Ranbaxy's domestic business generates only 25% of sales, and the path ahead looks tough as growth has slowed down due to pricing pressures and intense competition," Deepak Malik, an analyst at Emkay Global, told the news service. "Hence, the company has to look at global markets to make more money."
In the U.S., there has been a steady stream of patent expirations over the past couple of years, giving generics makers plenty of opportunity to compete with once-blockbuster brands. Another $15 billion in drug-patent losses are on tap for 2013, including Eli Lilly's ($LLY) antidepressant Cymbalta, which falls off patent in December.