Biotech - the battle of branded drugs and generics

With a string of patent protections expiring in the USA in 2010 onwards, many large pharmaceutical and biotechnology companies focused on producing branded drugs had been on the edge in the first quarter of this year, notes the South Africa-based consultancy Rothmans Research. The main reason for this industry-wide caution had been the viral uncertainty spreading throughout the industry prior to the historic US health care reform that was passed into law in March.

Nonetheless, the new law turned out to be a good bargain for big Pharmas and biotech players. On top of securing a 50% tax credit (applicable for small- to mid-cap biotech companies) which will be a key element to promote research in creating new drugs, the industry received a crucial allowance from lawmakers which approved the 12-year patent protection. This by itself takes away the overwhelming burden the branded-orientated companies have been facing from generic drugs producers, and also gave a boost of confidence to the big players in the space which would have otherwise been reluctant to invest in R&D, noted Rothman Research.

But there are still challenges