Generic drug approvals on the rise in US; 101 applications get nod in Oct

Since April, top Indian firms have secured approvals for 203 drugs: Edelweiss Securities report

The US Food and Drug Administration (FDA) approved 101 generic drug applications in October — highest in a single month, the agency’s commissioner Scott Gottlieb tweeted on Wednesday. These included 14 tentative approvals. 

Records show Indian companies and their foreign subsidiaries secured approvals for 35 applications in that month.

The rise in approvals is helping Indian drugmakers to expand the product offerings but on the flip side has resulted in increased competition and has hit margins. 

“We are seeing around 10 per cent price erosion in the US market and the pressure is likely to continue for 15-18 months. While most of the approvals were for oral solid formulations earlier, Indian firms are securing approvals for more complex products. On a short-term basis, there will be pain but from FY20 we will see approvals for more complex products, including biosimilars and injectables,” said Amey Chalke of HDFC Securities.

The US government is pushing the use of generic drugs to lower health care costs and has taken measures to increase availability of limited competition drugs in the recent months. The move also comes in the wake of public outcry over priced drugs by certain drugmakers.

The approvals will help in improving access (to medicines) and increasing competition, Gottlieb said in his tweet.

Generic drug approvals in the US are on the rise, too. In the first 10 months of 2017, the US FDA gave full approval to 763 applications against 651 in 2016.  Indian firms, which earn 30-50 per cent of revenue from the US, have also benefitted. From April, top Indian firms have secured approvals (including tentative approvals) for 203 drugs, according to a recent Edelweiss Securities report. 

Leading the pack is Cadila Healthcare that got 65 approvals followed by Aurobindo Pharmaceuticals with 34 approvals, the report said. “Genericisation is a wave across the world. Ironically with genericisation also comes the need for companies to stand out in the crowd,” said Utkarsh Palnitkar (national head), lifescience practice, KPMG.