Pfizer-Aurobindo pact may expand to CIS, Asian markets

Pfizer, the world’s largest drug maker, which announced a licensing and supply pact on March 3 with Aurobindo Pharma to source over 50 generic medicines for sale in the US and Europe, will expand this to about 30 countries in Asia and the CIS (Commonwealth of Independent States, once part of the old Soviet Union) region soon.

Both Pfizer and Aurobindo had said they would be looking at expanding the agreement. Countries such as Russia, Indonesia and the Philippines are likely to be covered in a new agreement to be finalised in a month, say the sources.

While the move will help the “established products business” of New York-based Pfizer to expand its footprint outside US and European markets, Aurobindo will see a boost in its revenue flow due to assured volumes.

The product range offered by Aurobindo covers central nervous system drugs to pencillin injectables. While 44 of these are meant for oral consumption, 12 are penicillin and cephalosporin injectables, sources say.

“The current agreements are targeted towards US and European markets and we are exploring the possibilities of extending this partnership,” said PV Ramaprasad Reddy, chairman of Aurobindo.

The move comes against the backdrop of dwindling drug discoveries and an increasing number of patent expiries that are affecting the revenue flow of multinational pharmaceutical majors, including Pfizer.

Pfizer’s decision to put its weight behind the quality credentials of Aurobindo is also significant in that the FDA, the US drug regulator, had recently charged India’s largest drug maker, Ranbaxy, with falsifying technical data from one of its Indian facilities to get marketing approvals.

Terming the outsourcing deal a win-win one, Sujay Shetty, pharmaceutical practices director of Pricewaterhouse Coopers, said Pfizer and Aurobindo had chosen an established business model among global drug makers. “The GSK-Aspen agreement, where a global drug major entered into a supply pact with South Africa’s Aspen, is another example,” he said.

The current agreement is an expansion of a similar arrangement Aurobindo initiated with just five drugs (with Pfizer) in May last year.

“With 51 products, it’s a very big deal and the first of its kind for any Indian drug firm. Aurobindo will gain significantly as Pfizer’s marketing muscle will drive volumes,” said Ranjit Kapadia, head of pharma at brokerage firm Prabhudas Liladhar.

Aurobindo is among the leading Indian firms when it comes to marketing approvals from the USFDA. The company has filed 145 drug approval applications in the US and got marketing approvals (including tentative ones) for over 90 medicines in that country.