And Indian mass manufacturing of anti-bacterial sulfa drugs has forced American and European companies to stop making them because they cannot match Indian prices. India's process-based patent laws infuriate Western pharmaceutical companies. But the rules have helped India build a large local industry. Ramu Deora, president of the government-sponsored Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council, predicts India's pharmaceutical industry will become one of the world's biggest. The cloned drugs are sold in India and in countries where product patents are not effective, such as in some African countries, most of Latin America, the nations of the former Soviet Union and the Middle-East.
Exports account for more than a third.
The anti-impotence drug could join the lucrative list. The company specializes in cephalexin antibiotics and has a steady market in China, Latin America and West Asia. But world prices of cephalexin have been dropping in the past eight months, squeezing margins and pressuring Orchid's share price. Mindful of Pfizer's firepower, Srinivasan says Orchid will be looking at countries where patent laws protect processes and not end-products. It can make a lot money even in that circumscribed market.