US ruling to hit Indian drug exports

The US Food and Drug Administration (USFDA) has recently taken significant steps to promote "authorised generics" produced under licence from the patent holder, a big pharmaceutical company in most cases. This move could severely impact Indian pharmaceutical companies targeting the US generics market.

A company, which gets the first USFDA approval to launch a generic medicine, gets a 180-day exclusivity period once the drug goes off patent.

Prices rule high during this period as competition is kept away. Leading Indian pharmaceutical companies are focused on being the first to file with the USFDA for a whole range of drugs scheduled to go off patent over the next few years.

Recent USFDA judgments have clearly indicated that the authority considers generic prices to be ruling high during the exclusivity period.

This has made it look favourably at authorised generics that can be launched during the period of exclusivity with the aim of bringing down prices.

A few days back, the USFDA denied petitions submitted by Mylan Pharmaceuticals and Teva Pharmaceuticals, USA, seeking to prohibit the marketing and distribution of authorised generic versions of branded products during the period of exclusivity.

It turned down another petition filed by Pfizer seeking to prevent generic applicants' waiver of the 180-day exclusivity. "Marketing of authorised generics increases competition, promoting lower prices for pharmaceuticals, particularly during the 180-day exclusivity period in which the prices for generic drugs are often substantially higher than after other generic products are able to enter the market," a USFDA Talk paper said, adding: "Allowing eligible generic applicants to waive the exclusivity promotes competition by enabling other generic applicants to market their products sooner."

Indian pharmaceutical companies, on their part, said this was unlikely to have a significant impact on their business. "There have been authorised generics in 5-6 cases. Except for one, there has been no impact on generic prices," DG Shah of the Indian Pharmaceutical Alliance said.

Added Nicholas Piramal India Ltd President Harinder Sikka: "Indian generic companies have nothing to lose. Nobody can beat Indian generic prices. So even if authorised generics are allowed, these cannot match prices of Indian generic medicines."

Drug war

• A company, which gets the first USFDA approval to launch a generic drug, gets a 180-day exclusivity period once the drug goes off patent.
• Indian pharma firms are trying to become the first to file with the USFDA for a whole range of drugs scheduled to go off patent over the next few years.
• Companies have said the ruling is unlikely to have a significant impact on their business.