Indian companies likely to garner up to 50% USFDA nod share in 2023

Companies may get up to 375 ANDA approvals in 2023, more than last year's 355

Indian companies are expected to secure a 48–50 per cent share of approvals for new drugs from the US Food and Drug Administration (USFDA) in the 2023 calendar year, similar to the previous year, noted analysts.

According to an analysis by Ashika Research, approximately 762–782 abbreviated new drug approvals (ANDAs) are anticipated globally from the USFDA.

If we estimate that Indian companies hold a 48 per cent share, the number of ANDA approvals for Indian companies is projected to be 365–375 in 2023, slightly more than last year’s figure of around 355.
 

“To comply with USFDA requirements, companies have focused on strengthening their processes with the assistance of global regulatory consultants, improved training, and automation in recent years. Additionally, there has been an increased overall focus on diversification, including facilities across geographies and third-party filings,” said Krishnanath Munde, associate director at India Ratings & Research (Ind-Ra).

 

Munde said that currently, USFDA inspections have yet to reach pre-pandemic levels. The agency expects an increase in inspections by the USFDA in the remainder of 2023–24 and 2024–25; however, these are unlikely to cause significant disruptions.
 

Ind-Ra highlights that players with significantly higher exposure to US markets and a low level of diversification could still experience some impact if USFDA inspections are unsuccessful.
 

According to a Motilal Oswal Financial Services (MOFSL) report, the number of global inspections conducted by the USFDA annually decreased from an average of 2,600 during 2012–13 through 2018–19 (12 months ending September) to around 1,100 in the last four years.
 

USFDA follows an October–September calendar.

 

“The inspections at India sites reached a peak of 334 (2018-19; 12 months ending September) from 112 in 2012-13. The inspection declined to eight during the Covid period (2020–21; 12 months ending September). After Covid, however, there has been a healthy revival in inspections at Indian sites. Inspections are likely to reach 139 over the 12 months ending September 2023,” pointed out MOFSL analysts.
 

With a backlog of inspections from good manufacturing practices (GMP) and/or pre-approval perspectives, analysts expect USFDA inspections at India sites to surge over the next two to three years. Tablets, capsules, and injectables have a higher approval rate, while powder and gel categories would register a decline in approvals during the year.
 

At the same time, ANDA filings have decreased in the recent past, as Munde pointed out. This is due to the increased focus on filing complex and high-margin, economically viable products.
 

Approvals from the USFDA have been steadily increasing, thanks to the Generic Drug User Fee Act (GDUFA), a law designed to speed access to safe and effective generic drugs for the public and reduce costs to the industry.
 

MOFSL analysts also pointed out that the overall rate of filings by Indian companies has been decreasing — from 295 in 2016–17 to 183 in 2022–23. They further elaborated that the pace of fresh filings was reducing due to intensified competition questioning the viability of the business at the product level and higher regulatory filing costs.
 

“Besides these, several Indian pharmaceutical (pharma) companies are facing official action indicated classifications or warning letters (or imports), which are hampering the prospects of the business as the approvals and filings get delayed,” MOFSL analysts said.
 

For example, Sun Pharmaceutical Industries’ filing pace has been tapering from the 2018-19 level of 21 filings since the company is facing pricing and competitive pressures as well as compliance issues at certain manufacturing plants. This sharp decline is partly because of an import alert issued at its Halol plant and a current GMP issue at its Mohali plant.
 

Aurobindo Pharma, on the other hand, has had the highest number of filings in the US, with about 50 filings per year.
 

Similarly, Zydus Lifesciences is second behind Aurobindo Pharma concerning filings.
 

So, will the reduced rate of filings affect the approval rate in 2024?
 

Analysts and companies don’t think so.
 

“There is already a built pipeline, and approvals will keep coming. Therefore, we don’t see a reduced rate of approvals next year,” said the managing director of a Gujarat-based export-focused pharma company.
 

Nirali Shah, research analyst with Ashika Research, said: “In the next four to five years, as the generic cliff approaches and we acknowledge India’s dominance in generics, we could see an 80–100-basis point rise in industry margins in 2023-24.”
 

“US biosimilar patents expiring will create a massive $35–40 billion opportunity. Indian pharma’s recent acquisitions boost their specialty medicine range, along with their strong emphasis on biosimilars. Both avenues are set to transform the landscape amidst this upcoming opportunity collectively,” she added.