Magazine article Drug Topics

Armed with Certain Strengths, Indian Generic Companies Are on a Tear

Magazine article Drug Topics

Armed with Certain Strengths, Indian Generic Companies Are on a Tear

Article excerpt

India's generic manufacturers file more successful abbreviated new drug applications with the Food & Drug Administration than does any other foreign country. In the second half of last year, Indian companies received 72 ANDA approvals, second only to the 95 approved ANDAs filed by U.S. companies. Israel was a distant third with 22 approved ANDAs in that period.

"As more and more generic companies enter the market, especially from countries such as India, existing players fight to retain market share, lowering price per pill through competition and squeezing margins," according to a recent report by Thomson Scientific.

In addition to India and Israel, more than a dozen other nations received a total of 66 ANDA approvals between July and December 2007. That means that two out of three approved ANDAs are from foreign-based companies.

Indian companies are the strongest foreign competitors to U.S.-based companies. The first Indian companies showed up here about 10 years ago, "starting with the manufacturers of active pharmaceutical ingredients (APIs), particularly Dr. Reddy and Ranbaxy," said Kate Kuhrt, director of genetics and API intelligence, pharmaceutical and chemical market, for Thomson Scientific.

It was in 2003 that the number of Indian companies competing here began increasing dramatically. "That year, only five companies received FDA ANDA approval," she said. "By last year that had increased to 16 companies."

The Indian companies are a "major presence now in the U.S.," agrees Edward Thwaite of E.W. Thwaite Associates, a generic industry consulting firm in Totowa, N.J. "And they are doing very well. It's impressive, seeing as they had much less presence just five years ago. Low labor costs are an obvious advantage."

Indian companies are highly aggressive and the companies find the United States "to be an attractive market," said Kuhrt, "because demand here is so high and continually growing." As more and more blockbusters come off market and as payers such as Medicare continue to encourage utilization of genetics, Indian companies are increasingly competitive. "But it is very important to note that there is a downside to the American market that (multinational) companies also recognize. Because competition is intense, there is a great deal of downward pressure on prices and profits."

Safety is a concern

While generics from India have a cost advantage, how safe are they? Ranbaxy, a leading Indian generic manufacturer, initiated a voluntary recall of 73 million tablets of the anticonvulsant generic drug gabapentin in late 2007 because the allowed level of impurities in the tablets exceeded specified limits, according to the FDA. …

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