Domestic pharmacompanies received more than 300 approvals in 2017 to launch generic drugs in the US, which is an all-time high. The clearances came despite regulatory pressure from the US Food and Drug Administration (FDA), and unprecedented warning letters issued to the pharma companies’ facilities.
The final approvals for Indian players are up by nearly 43 per cent from 211 in 2016, and corner about 40 per cent of all global filings in the highly lucrative around $70-billion US market. This, even as all drug biggies — including Zydus, Sun Pharma, Dr Reddy’s and Cipla — faced regulatory ire, while some were pulled up for manufacturing lapses by the US regulator during last year.

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In terms of each company, Zydus leads with 66 approvals in 2017, followed by Aurobindo (52), Glenmark (18), Lupin (17), Gland Pharma (16) and Cipla (10). Zydus cornered a majority of US filings as its Moraiya facility, which contributes about 60 per cent of US sales, came out from under USFDA scanner in June last year. Sun Pharma remained static at 10 approvals, due to its Halol plant continuing under the regulatory glare.

Master

The US generics market, a key driver of Indian pharma’s growth, has always been a dynamic market. But the pace of change has accelerated in the last few years. The increase in competition and consolidation of distribution channels have led to the US generics business getting commoditised. Price erosion has been at an all-time high and this has impacted operating margins significantly. Major domestic companies earn at least 40 per cent of their overall sales from the US.

To maximise margins, companies are now launching complex generics and speciality products.Glenmark Pharma chairman & MD Glenn Saldanha says, “While the number of ANDA (abbreviated new drug application) approvals continue to remain strong for us, we, however, have begun the process of transitioning the US business to a specialty/innovation business. While the generics business in the US will still grow, the future for us will be in the specialty and innovation business. We plan to file our first specialty NDA in the next few months in the US.”
The US generics market stays very attractive and continues to see the entry of new entrants — Mankind Pharma launched its first product in the US in September last year. An analyst from Credit Suisse says, “Fragmentation is increasing fast in the US generics market and it is validated through ever-increasing ANDA filings. For calender year 2017, overall ANDA filings were one of the highest at 1,128 (up 11 per cent year-on-year). We expect approvals to increase by another 50 per cent over the next two years and therefore expect price erosion to accelerate further. We expect the market to decline at mid-single digit CAGR (compounded annual growth rate) over next three years, and the profit pool for generic industry to decline at high single-digit CAGR.”
Indian pharma cos get record 300 USFDA generic drug nods in 2017

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