Dr Reddy’s Research FoundationDr Reddy’s Laboratories could be affected if a recent US bill that seeks ban on MNC Pharma Companies from transferring authorised  generics to third parties becomes a law.

In a report dated January 20, 2009, Bank of America-Merrill Lynch had estimated that Dr Reddy’s earned nearly $74 million in the December 2008 quarter from the sale of authorised generics brand Imitrex, which was launched in November last year.

Analysts said Dr Reddy’s sold the product only five weeks in the December quarter which showed its huge potential. However, the company officials did not comment. An e-mail sent to the company’s spokesperson on Tuesday remained unanswered.

Dr Reddy’s had launched Glaxo Pharma’s Imitrex tablets (medication for treating migraine headaches) in 25 mg, 50 mg and 100 mg in the US. It is understood that the Hyderabad-based firm was the first to launch an authorised generic version of this product in the US.

The launch of authorised generics had helped Dr Reddy’s to ramp up its North American sales to $137 million in the December 2008 quarter as compared with $36 million a year earlier. For Dr Reddy’s, North American sales accounted for 36.1% of its total sales of $379 million in third quarter of FY09.

However, Indian generics exporters like Sun Pharma and Cipla could potentially benefit from the US move. Says Rajesh Vora, vice- president, ICICI securities: “As and when this bill is passed in the US congress, it is potentially a very big positive step for the global generics industry, including the Indian generics industry.”

Indian generic exporters like Sun Pharma and Cipla could potentially benefit from a bill that has been recently introduced in the US Senate, which aims to further open up the US generics market.

The bill has been sponsored by Senator Herbert Kohl, a democrat from Wisconsin, along with four co-sponsors. It had been introduced on February 3 and it has now been referred to a committee of the US Congress, for further examination.

Keen to cut healthcare costs in their country, American senators have put up the bill in the US Senate, which aims principally at making it easier for generics to gain access to the US market. The US generics market is the world’s largest, and is valued at $70-75 billion annually.