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Pharma companies, operating in the American market, may witness a significant rise in their cost of generic development starting next year. This is because companies will have to submit data for three batches of their products, up from one batch currently, while seeking drug approvals in the US. The data includes those from safety, efficacy and stability study of a drug.
“The USFDA (Food and Drug Administration) has now mandated that from January 2014 onwards data has to be submitted for three batches,” an industry representative, involved with generic development in a domestic pharma company, told Business Standard.
The move is expected to push the cost up as well as the time taken for various studies, he added. According to the official, the cost of generic development may go up three times in some cases, especially where the active ingredient used is expensive. One batch of a drug product contains approximately one lakh units of medicines.
According to an analyst, the total cost of generic drug development is estimated at around $3 million per product. “The major cost increase will come due to active ingredient. The more the number of batches, the more ingredient is required. Besides, we will also have to do studies for a longer period of time,” the official said.
Major domestic drug makers such as Sun Pharma, Lupin, Dr Reddy’s Laboratories, Cadila Health and Ranbaxy file around 15-20 generic drug application each seeking approval from the US drug regulator every year. Even smaller companies such as Torrent Pharma and Alembic file 5-10 Abbreviated New Drug Application (ANDA) every year with the USFDA.
According to Praful Bohra, senior research analyst, Nirmal Bang, so far a total of around 800 ANDAs have been filed by major domestic companies including Sun Pharma, Aurobindo, Dr Reddy’s Labs, Lupin, Glenmark, Cadila Health and Torrent.
A company executive explained, while seeking approval for commercialization of generic drugs in the US, companies are required to submit various data such as from stability study, where a drug is currently kept in accelerated conditions with 40 degree Celsius temperature and 75 per cent humility for three months. “This period will also increase from three months to six months,” the official said. Besides, the drug will also have to be kept in real time conditions for 36 months.
The official said, it is difficult to quantify the exact increase in time and cost because they will depend on various factors varying from drug to drug.
According to Bohra, the US generic market is estimated at around $30 billion, of which Indian pharmaceutical companies account for 10 per cent market share at $3-3.5 billion dollar.
Given that Indian companies are major suppliers for generic drugs and the US the biggest market for them, the latest move is set to have a mounting cost impact on their businesses going forward.
However, it is believed some companies may be able to mitigate the impact if they already have capacities and staff for doing extended studies.
Europe already asks for data for three batches of a drug.
