The Hindu Business Line : Reliance setting up pharma unit at Jamnagar SEZ

Generic moves
Construction work on the new plant is expected to start later this year.
Globally, over $65-billion worth of medicines are estimated to go off patents by 2010.

Margao (Goa) May 22 The Mukesh Ambani-controlled Reliance group looks set to tap into the opportunity of generic medicines going off-patent, through its fledgling company Reliance Pharmaceuticals Ltd (RPL).

The company is looking to set up a manufacturing facility at the special economic zone in Jamnagar, Gujarat.

Construction work on the new plant is expected to start later this year, Mr Lalit Kumar, RPL's President and Chief Executive Officer, told Business Line at the sidelines of a conference organised by Frost & Sullivan here. It takes an estimated 18 months to have a manufacturing facility up and running, he said.

Drugs off patent

RPL is a wholly-owned subsidiary of Reliance Life Sciences (RLS), which in turn was founded by Mr Mukesh Ambani. While RLS operates in the biological products segment, RPL would look to tap the opportunity of generic pharmaceutical drugs going off patents, said Mr Lalit Kumar. Globally, over $65-billion worth of medicines are estimated to go off patents by 2010.

New company

Plans for the new company are still on the drawing board, he said. Though no financial details were given on the new plant, he said that it would have a capacity of "several hundred tonnes" with an investment of "several hundred crores". Generic companies across the globe are vying with each other for a share in the generic pie.

There are seasoned Indian pharma companies such as Ranbaxy, Dr Reddy's, Cipla, Sun Pharma, Glenmark, Unichem, Lupin etc., who are active in the generic space.

New players such as GVK BioSciences, for instance, are also targeting this space of generic medicines.

Competition

When an innovative drug goes off patent, the 20-year period of exclusive sale comes to a close for the company that originally made the drug. When this happens, other drug companies are legally allowed to make generic copies of the drug that has gone off patent. But the competition is high in this space, causing rapid erosion in sales of the innovative drug.

For instance, generic competition caused prices on the $1-billion antibiotic medicine, ciprofloxacin, to fall by about 90 per cent, within days of the drug going off-patent.

Mr Kumar admitted that it was a competitive segment, but the scale of business envisaged by RPL would take care of this.

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