Indian firms capture quarter of generic drug approvals in US

Indian generic companies, such as Aurobindo Pharma, Wockhardt, Ranbaxy, Dr Reddy's and Sun Pharma have captured almost a quarter of generic drug approvals in the US since December 2006.

Of the 186 original abbreviated new drug applications (ANDA) granted by the FDA since December, approximately 12 Indian companies have captured 43 approvals or 23 per cent of the total. The figure compares with only 23 out of 139 final approvals, or 16.5 per cent, in the corresponding period of 2005 to 2006.

In the US, a pharmaceutical company must submit to the FDA an ANDA with data on safety, efficacy and processes in order to receive marketing approval for generic products there. The Waxman-Hatch Act was passed in 1984 in order to ensure less costly generic drugs could be available in the US by allowing the FDA to approve applications to market generic versions of brand-name drugs without reproducing expensive clinical trials.

Industry analysts have said the rate of approvals for Indian companies is significant as they only received 57 final approvals between 13 companies (including 11 approvals for Dr Reddy's Lab and seven for Orchid) between January and November 2006. During the same period in 2005, the FDA had approved only 50 ANDAs from nine Indian companies.

An Edelweiss Securities analyst said that the approvals showed bright prospects for Indian pharmaceutical firms in the US and that the increased share in the US generic market would ensure better overall returns.

According to analysts, the approval rate for generics was high at the moment because blockbuster drugs like Zocor (simvastatin) and Zoloft (sertraline) had lost patent protection in 2006. As a result, availability of drugs was a concern and the FDA was more likely to approve drugs on the same day of patent expiry in the short-term.

Aurobindo Pharma received the highest number of approvals between December 2006 and April 2007 with eight, then Wockhardt with seven), Ranbaxy with six and Dr Reddy's with five approvals. Zydus Cadila received four final approvals during the period, while Sun Pharma and its US subsidiary Caraco got six approvals. The other companies include Lupin, Glenmark, Torrent and Unichem.

From the 18 approvals given for the generic version of Pfizer's blockbuster antidepressant Zoloft, which went off-patent in February 2006, seven Indian firms including Dr Reddy's, Sun Pharma, Ranbaxy, Torrent, Lupin, Aurobindo and Zydus were awarded final approval. FY05 sales for Zoloft were USD 3.3bn in 2005.

Out of the six Zocor final approvals in December 2006, three approvals were granted to Zydus Cadila, Dr Reddy's and Aurobindo. Zocor totalled USD 4.4bn in sales in FY05, while the patent expired in June 2006.

Generic drugs, therapeutic equivalents of innovator drugs arrived at through different processes, have a growing market in the US. North America, which accounts for 45 per cent of global pharmaceutical sales, grew 8.3 per cent to USD 290.1bn in 2006, up from 5.4 per cent in the previous year. Generics constitute almost half of the volume sales and has a market in the US valued at USD 54bn, according to IMS Health.

Legislative attempts to control drug expenditures, the increased influence of payers to drive more cost-effective healthcare, generics competition, and the introduction of new biosimilars will impact US prescription growth in five years.

In 2006, prescription volume of unbranded generics grew by 13 per cent and sales of unbranded generics grew by 22 per cent, especially due to generics entering the market for Zoloft and Zocor.

"Branded blockbusters such as Norvasc and Ambien are set to lose patent protection in 2007. US pharmaceutical sales would growth at six to nine per cent through 2010 as a result of the influence of lower-priced generics," said IMS Health. It is estimated that USD 80bn worth of drugs are set to go off-patent during 2010-15.