Indian Generic Drug Firm suffers Defeat

A US court on Friday banned Dr Reddy's from selling a cheap generic version of Norvasc, a popular anti-hypertension drug made by Pfizer. After the ruling shares in the Indian Generic maker dropped almost 25%.

The ruling overturns a previous court decision, and is a severe blow for the Indian firm's business model which is aimed primarily at producting of cheap generic copies.

Dr Reddy's and Indian rivals such as Cipla and Ranbaxy want to copy drugs still under patent, because they offer far more generous profit margins.

Anyone is allowed to copy a drug whose copyright has lapsed, but margins there tend to be modest. Dr Reddy's argues that its generic drugs do not violate the copyright of companies such as Pfizer, since they are careful to ensure that their copies are never exact.

The firm is the most aggressive of its peers, with three-quarters of its pending US patent applications based on challenges to existing intellectual property. But the practice has run into stiff opposition from major pharmaceutical companies, which say they are entitled to reap the rewards of their own research.

A number of drugmakers on both side have petitioned organizations such as the International Charter to intervene and suggest a course of action. This has been backed up by regulators, especially in the US. Meanwhile, US consumers are becoming ever more vocal about the high prices of patented medicines, something that has led to a boom in internet and black-market sales.