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Paradigm Shift

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Germany’s merck serono kicked off what could be a troubling trend for Indian pharmaceutical companies when it stopped development on melogliptin, an experimental anti-diabetes drug it had licensed from Mumbai-based Glenmark Pharmaceuticals. Originally, the deal between the two companies had been celebrated by Glenmark as it would have seen Merck pick up the costs of conducting the expensive human trials for the drug. But Merck has decided to drop further work on melogliptin after it acquired Swiss biotech company Sereno and decided to focus on speciality areas, such as oncology and fertility.
The decision reflects how dynamics in the global pharmaceutical industry are changing as companies struggle to fill weak product pipelines and sidestep competition from generic drugs by focusing on specialised cures. This could hurt Indian companies keen on licensing potential drugs to foreign companies as most local firms have focused on traditional areas, such as diabetes, pain and cardiology. “I won’t be surprised if such moves are afoot in other companies,” says Ashish Singh, the New Delhi-based managing director (MD) of Bain Consulting. He also says the push away from R&D in primary care to specialty areas where there aren’t enough drugs, little generic competition, and trial batches smaller is likely to become stronger.
Merck’s decision to get out of anti-diabetes drugs underlines the problem. In the late 1970s, it had given the world metformin, a drug that came to be acknowledged as the gold standard in diabetes management. But Merck has been unable to repeat that success. Marketed drugs in Big Pharma’s traditional focus areas, such as cardio, diabetes, pain and psychiatry are losing patent protection in the West and face competition from cheap, generic alternatives. It is also growing more expensive to take a new drug to market as regulators demand ever larger and costlier trials.
Pfizer, whose cholesterol reducer Lipitor is set to lose patent protection in the US in 2010, recently announced a new R&D chief to review and prioritise fund allocation in R&D. It also brought in a senior oncology research executive to head clinical development. Pfizer’s attempt to replace Lipitor with another cholesterol drug torcetrapib failed when it was found to have unacceptable safety issues in trials.
Still, not everyone believes all Indian firms should now mirror the push towards specialty drugs. “There is still large opportunity in primary care,” says Glenn Saldanha, MD of Glenmark. He cites the vacuum created by withdrawn painkiller Vioxx and the safety concerns surrounding that class of drugs as an example of this opportunity. Glenmark has licensed a painkiller to US-based Eli Lilly and says he will also offer melogliptin to other foreign firms.

Yet the question of whether Indian firms need to move beyond ‘me-too’ innovation to survive in a more demanding world remains. Melogliptin is a third in a new class of diabetes drugs of which the first is on market, and the second on its way there. The market is therefore competitive. Indian firms have done almost only this kind of research since the risk is lower. But it also means that unless it offers a superior value proposition a molecule has few takers and may be vulnerable to pipeline reviews.
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