RLL may corner 15 % of market for generic Augmentin suspension

EPP News Bureau - Mumbai

With Ranbaxy Laboratories Ltd getting the final approval for the suspension form of generic Augmentin (market of USD 272m) and Teva Pharmaceuticals not expected to pre-empt Ranbaxy, the Indian MNC is expected to gain a market share of at least 15 per cent for this dosage. Ranbaxy will easily achieve estimates of USD 48m of revenue from this generic for the current calendar, an analyst said here.

While Teva has not received approval for this dosage, there is a possibility that it will also get approvals for this dosage shortly. While Ranbaxy is not willing to indicate the date of launch of this dosage, there seems to be little threat of Teva pre-empting Ranbaxy here.

However, there is a possibility of Lek (part of Novartis group) pre-empting Ranbaxy in this dosage. But this event has low probability as Lek did not follow this strategy in the oral dosage of generic Augmentin. Hence the analyst believes Ranbaxy should be able to garner over 15 per cent market share in this dosage.

Ranbaxy has picked up a market share of less than 0.5 per cent even six weeks post launch of the oral dosage of generic Augmentin. This is because Teva has filled the supply chain with its product post its entry in early Dec’02, he says.

Ranbaxy faces no input constraint for this product and it makes little sense for Teva to continue this strategy as this would then force Ranbaxy to cut prices significantly. This will then result in the distributors asking Teva to match Ranbaxy’s prices even for its product that is in the supply chain. However, analysts believe that it will take another 4-6 weeks for Ranbaxy to commence gaining market-share. Worries on low market-share for oral dosages of Augmentin are unwarranted Ranbaxy was the third generic group (after Novartis - Geneva and Lek and Teva) to launch the oral dosages of Augmentin (an antibiotic with sales of around USD 1bn).

Augmentin is a mixture of amoxycillin and clavulanic acid. The latter is a very complex product to make with the bulk drug producers being GSK, Biochemie (fermentation arm of Novartis), Lek (subsidiary of Novartis) and DSM. Thus DSM is the only merchant supplier of this bulk. Hence we do not believe that much competition is expected in this drug.

While Ranbaxy was the second company after Geneva to get the final approval from USFDA, Ranbaxy was the last generic company to launch the product as it wanted to avoid any litigation risk. (While the Lower Court in US has stated that GSK, the patentholder’s patents expiring in Dec’2002 and 2017 and 2018 are invalid, GSK has appealed against these decisions. GSK as also Ranbaxy indicate that there is a small possibility of GSK’s Dec’2002 patent being held valid by the Appeals Court, which is now hearing the case. In order to avoid the risk of the Appeals Court upholding the Dec’2002 patent, Ranbaxy launched the product on Jan 13, 2003, much after it got the final approval from the USFDA - mid Sept’2002).