Cipla announced plans on Friday that will see it become the first company to sell a generic version of the anti-influenza drug Tamiflu.
The company claimed it was already making generic Tamiflu (oseltamivir phosphate) and should have its first batch of 1,300 treatments on the market in early 2006.
Tamiflu, which reduces the severity and spread of traditional flu, is already in short supply throughout the world, as countries gather stockpiles of the drug amid fears of a possible avian flu epidemic.
Demand for Tamiflu in the US alone has jumped sevenfold in the past eight weeks from this time last year.
US Drug stores filled almost 87,000 prescriptions for Tamiflu during the eight weeks ending Oct 7, up from about 13,000 a year earlier, according to data released by market researcher Verispan LLC in Yardley, Pennsylvania.
Despite the short supply, Roche, which makes Tamiflu, has refused to license generic versions of the drug, in spite of pressure from several countries and United Nations Secretary General Kofi Annan.
The development of generic Tamiflu could potentially provide Cipla, with a considerable portion of Roche's market share.
The challenge to Roche's patent monopoly may be welcomed by many, amid growing concern that drugs such as Tamifil will be inaffordable for many poor countries, increasing the chance of a pandemic that most experts believe will begin in the poor countries of south-east Asia.
A generic drug is an exact chemical copy of a brand-name drug, identical in dosage, safety, strength, administration, quality, performance, and intended use.
All new drugs have patent protection for a specified number of years, giving the founding company the sole right to sell the drug while the patent is in effect.
As patents near expiration, rival manufacturers can apply to produce cheaper generic versions of the drug.
Generic manufacturers cannot yet legally sell the patented drug Tamiflu in the West and parts of Asia, including India, which recently tightened its patent laws.
But the laws in many of these countries allow governments to invalidate patents during emergencies, such as a pandemic.
The move by Cipla aims to take advantage of this loophole by filling any potential market shortages of Tamiflu in the event of an epidemic.
"We plan to sell the tablets at a considerably lower price than Tamiflu in countries where the patent is not valid," Amar Lulla, joint managing director of Cipla, told Bloomberg.
A strip of 10 Tamiflu tablets is currently expensive, costing about $60 (€50).
Patients are advised to take a tablet daily for at least a week, and the dosage could extend up to six weeks for people living in epidemic-infested areas.
Brokers in London estimate the total market for bird flu-related medicines could top £3 bn (€4.4 bn).
The H5N1 strain of avian flu has been sweeping through poultry populations in Asia since 2003, and has so far killed at least 65 people.
The virus does not pass from person to person easily, but experts fear the virus could mutate into a form that could be passed on among humans.
Global efforts are being made to stem the spread of the H5N1 virus that's resulted in the slaughter of more than 140 million birds as it raced through China and Russia from its source in Southeast Asia.
Cipla is India's second-biggest generic drugmaker and sells its products in more than 150 countries.
Roche is a leading pharmaceutical company, having been active in the discovery, development, manufacture and marketing of healthcare solutions for more than 100 years.