[Ip-health] Indian pharma firms corner chunk of US drug approvals

[Prabhu Ram]

Indian pharma firms corner chunk of US drug approvals

P B Jayakumar / Mumbai May 1, 2007



As the Indian pharmaceutical companies aggressively pursue research
and development to capture the market for drugs going off-patent, a
dozen companies led by Aurobindo Pharma, Wockhardt, Ranbaxy, Dr
Reddy's Lab and Sun Pharma have bagged almost one-fourth of generic
drug approvals in the US in the four-and-a-half month from December
2006.

Out of the 186 original abbreviated new drug application (ANDA)
approvals granted by the US Food and Drug Administration (FDA) during
the period, about a dozen Indian companies bagged 43 approvals, which
is 23.11 per cent of the total approvals granted.

In comparison, Indian companies received only 23 out of 139 final
approvals (16.54 per cent) in the corresponding period last year.

As per the US rules, an ANDA with data on safety, efficacy and
processes have to be submitted to the US FDA for getting marketing
approval for generics in that country.

Waxman-Hatch Act, enacted by the US government in 1984, was to ensure
availability of less costly generic drugs by permitting FDA to approve
applications to market generic versions of brand-name drugs without
conducting costly and duplicative clinical trials.

Dr R B Smarta, managing director of Interlink Marketing Consultancy,
said, "This signifies how aggressive and technologically capable
Indian companies are to compete in the global generics market. An ANDA
for a drug is submitted years before the patent expires and requires
high skill levels to develop a process to manufacture a generic
version of the same potency and efficacy. The successful and
consistent approvals for many molecules show how prepared our
companies are to face the future. Globally, the trend is towards
generic drugs and this will augur well for Indian companies."

Industry analysts said this achievement is significant considering the
fact that Indian firms got only 57 final approvals (for 13 companies
including 11 approvals for Dr Reddy's Lab and seven for Orchid) in the
11-month period between January and November 2006. During the same
period in 2005, the US FDA had approved only 50 ANDAs of nine Indian
companies.

"The approvals show bright prospects for Indian pharma firms in the US
market and I feel pricing pressures will be less in this year compared
to previous years. Overall margins will be good for Indian companies
and with more approvals during the year and in the future, Indian
companies are likely to get a good share of the US generics market,"
said Pakhi Jain, pharma analyst with Edelweiss Securities.

"The approval for generics is high in the recent past because some
blockbuster drugs like Zocor and Zoloft came off-patent last year.
Availability of drugs is a concern and the FDA is likely to approve
drugs on the same day of patent expiry in the coming years," noted an
analyst.

Among the Indian companies, Aurobindo Pharma got the maximum approvals
(December 2006-15 April 2007) with eight, followed by Wockhardt
(seven), Ranbaxy (six) and Dr Reddy's (five).

While Zydus Cadila received four final approvals during the period,
Sun Pharma and its US subsidiary Caraco got six approvals. The other
companies include Lupin, Glenmark, Torrent and Unichem.

Interestingly, out of the 18 approvals given for sertraline
hydrochloride (generic for Pfizer's blockbuster antidepressant Zoloft,
which got off-patent in 2006) in February this year, seven Indian
firms =97 Dr Reddy's, Sun Pharma, Ranbaxy, Torrent, Lupin, Aurobindo and
Zydus =97 got final approval.

Zoloft had sales of $3.3 billion in 2005. Similarly, out of the six
simvastatin (Zocor) final approvals in December 2006, three approvals
were granted to Zydus Cadila, Dr Reddy's and Aurobindo. Merck's patent
on Zocor, the blockbuster cholesterol-cutting drug that totalled $4.4
billion sales in 2005, had 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 $290.1 billion 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 $54 billion,
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 6-9
per cent through 2010 as a result of the influence of lower-priced
generics," predicts IMS Health. It is estimated that $80 billion worth
of drugs are set to go off-patent progressively by 2010-15.