India is set to rule the generics market for Loratidine, an anti-allergy drug, in the US.

After Geneva Pharmaceuticals, which got the exclusive right to launch the drug after Schering Plough's patent expired last year, sourced its entire stock from Morepen Laboratories, the two other companies that have now got the United States Food and Drug Administration's approval to market Loratidine in the US -- Canada's Genpharm and Ranbaxy -- will also source the drug from India.

While Genpharm, too, has entered into an exclusive agreement with Morepen, whereby it will buy the bulk drug only from the Indian company, Ranbaxy will source Loratidine from its local facilities.

In fact, Loratidine is Ranbaxy's first USFDA-approved over-the-counter product in the US. Therefore, all generic Loratidine selling in the US will have its origins in India.

Though Loratidine prices have crashed substantially since it went off patent and became an OTC product, it has a large market.

Before its patent on the drug expired, Schering Plough's Loratidine, which used to sell under the brand Claritin, had annual sales of $3.5 billion in the US.

Morepen, according to company sources, has supplied Loratidine worth $15 million to Geneva Pharmaceuticals.

Earlier, Morepen had been eyeing a tie-up with Schering Plough to supply Loratidine. A team from Schering Plough had also visited Morepen's facilities in India.

As prices were set to fall after the expiry of the patent, Morepen was hoping that Schering Plough would source the drug from a low-cost producer like it.

However, once the deal with Geneva Pharmaceuticals was sealed, Morepen's capacities were fully used and, therefore, the tie-up with Schering Plough was put on the backburner.

However, the sources said with new entrants coming up, Geneva Pharmaceuticals' offtake of Loratidine was likely to reduce, which could lead to reopening of the negotiations with Schering Plough.

Morepen has almost 65 per cent of the non-innovator capacity, that is excluding Schering Plough, for Loratidine in the world. The company has claimed to be the cheapest producer of the drug in the world.