Indian manufacturers set to cash in on US generics market

Indian pharma companies are well positioned to generate strong revenues from the US generics market

Indian pharma companies are well positioned to generate strong revenues from the US generics market thanks to the receipt of many abbreviated new drug application (ANDA) approvals from the US FDA.

Out of the 255 ANDA approvals by the US FDA from January to July 2013, Indian generic players received 103 approvals (which accounts for over 40%). This has placed Indian generics manufacturers as leading global players. Among Indian generic firms, Aurobindo Pharma, Dr Reddy’s Labs and Sun Pharma have emerged as strong contenders in the US generic market due to their integration and vast product portfolio.

Indian generic drug majors are integrated players with a presence in both APIs and generic formulations. Hence, their margins are higher than those of other global generic companies which outsource their APIs. Moreover, personnel cost and operating expenses in India are lower than in other developed countries, making them the most cost competitive in the global generics market. Additionally, Indian pharmaceutical companies have benefited from the 9% fall in the value of the Indian rupee against the US dollar.

Sun Pharma’s acquisition of Dusa and URL’s generic business in the US recently, Aurobindo Pharma’s US FDA approval of its three manufacturing facilities after reinspection, and price hikes in the domestic market have all worked positively for the companies. While Sun and Aurobindo have strong pipelines of 320 and 191 approved ANDAs respectively for the US generic market, analysts say the strong pipeline is set to drive growth in the US.

Indian companies have entered the US generics market for six major products whose patent expired recently. While Aurobindo, Dr Reddy’s, Macleods, Torrent and Zydus Cadila brought competition in the generics space to Takeda’s antidiabetic drug Actos (market size in 2012 of $1.2bn), Ranbaxy and Dr Reddy’s provided generic competition to Pfizer’s drug Lipitor ($5.1bn).

Aurobindo, Dr Reddy’s, Sun, Torrent, Wockhardt and Zydus Cadila took on Sanofi Aventis’ blood thinner Plavix ($5.2bn), while Alkem, Aurobindo, Dr Reddy’s, Lupin, Sun and Torrent provided generic competition to AstraZeneca’s CNS drug Seroquel ($2.8bn).

Aurobindo, Dr Reddy’s, Glenmark and Torrent took on Merck’s antiasthmatic drug Singulair ($4.7bn), and Aurobindo, Dr Reddy’s, Orchid, Sun and Torrent provided generic competition for Eli Lilly’s CNS drug Zyprexa ($1.7bn).

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