Indian Pharma Investors Shrug Off Latest Lawsuit

Posted by: Bruce Einhorn on December 12, 2007

Barely a month goes by without news of a big multinational drugmaker suing an upstart Indian rival company for patent infringement. Big Pharma companies worried about threats from generics makers in India have been turning to U.S. courts for relief, so I guess investors weren’t too surprised to hear that Mumbai-based Glenmark Pharmaceuticals is the defendant in a new lawsuit brought by Sanofi-Aventis and Abbott Laboratories. Generics makers – not just in India but in Israel, the U.S. and Europe – argue that they’re not doing anything wrong and the Big Pharma companies are playing games in order to extend the lives of their patents and squeeze more profits out of their high-priced drugs.

Investors seem to be buying that argument in the case of Glenmark. At least, they don’t seem all that concerned, as they greeted the news of the lawsuit with a shrug. Glenmark’s stock price is trading just shy of the 52-week high it hit yesterday and the shares are up 79% this year, compared to a 47% rise for the Sensex index. Sure, there’s a new lawsuit. But Glenmark’s profits are up (87% in the last quarter), the company in October announced a partnership with Eli Lilly, and Glenmark and partner Forest Laboratories in October also won FDA approval to start clinical trials for an asthma drug. As Indian pharma companies like Glenmark increase their profile globally, they’re getting hit by more and more lawsuits from the big Western drug companies. There’s no avoiding that. At least for now, though, investors are betting that litigation won’t slow the company’s progress.

Reader Comments

raju

December 12, 2007 1:30 PM

If it is not patented in India, we're allow to make it. India rules. Stop the protectionism. Outsourcing helps the U.S. economy too.

jcage

December 13, 2007 2:18 AM

So India does not recognized foreign patent, well so much for the myth that India law protect IP and trademark!

The question if those patents have expired or not and if they are expired yes, feel free to clone it!

Raj

December 13, 2007 10:49 AM

Jcage: There is no such thing as an international or global patent. No country recognizes a foreign patent by default. Each WTO member country has its own patent laws and regulations. Many developing countries, including India, began issuing patents for medicines only in the last decade or so. Each country has the right to determine for itself the right balance between ensuring protection of corporate IP and ensuring availability of affordable healthcare. There is a reason why Canadian generic drugs are cheaper in the US than US drugs.
The medecins sans frontieres website (doctorswithoutborders.org) has a ton of material on the ongoing battle between Big Pharma and generics manufactures of the developing world.

Takeshi

December 13, 2007 3:39 PM

Suzuki should rethink its plan to open factory in India. After all, the Indians can always use excuse as developing nation to pirate our tech.

Raj

December 13, 2007 11:28 PM

Takeshi-san: Suzuki has had plants in India since 1983. They have been market leaders in India for over 20 years. I don't think they are complaining.

Coming back to the topic at hand, the lawsuit reported on here has at least 4 defendants - firms from Canada, Israel and India. The issue is related to big pharma vs generic manufacturers the world over. Aventis had a similar suit thrown out by the EU a couple years ago. The issue at hand is what is ethically patentable and what isn't. India had fought a long legal battle in the US to revoke the patent of a farm company in Texas which patented Basmati rice. Patent laws in the US do not prevent a Japanese restaurant in San Francisco from patenting raw fish. Does that mean the US does not respect IP?

akshay phatak

January 10, 2008 11:40 PM

Hi. News about the biggest biotechnology park at Vadodara, by Gujarat-Akruti-TCG JV comapany: www.akrutibiotech.com

AASUTOSH

January 4, 2009 11:49 AM

Yes, only a thing that is ethnically and authentically new deserves be patented n protected.
All natural products arent in the heirship of western world that any-body from west can claim its fatherhood over it....

same was done by US in case of Neem and Tulsi also, which indians have been using even before the inception of US Colonials civilization. So, india n china deserves their patent for which US N europe should pay them.

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