Indian firms' drug approvals by US rise 50% in 2017

At a time when the US business for the Indian pharmaceutical industry is in slow lane, drug approvals by the US Food and Drug Administration (FDA) have risen sharply.

Data collated from the FDA website show between January and June, Indian companies, including their US-based subsidiaries, received 141 drug approvals. This is significantly higher than the 94 approvals received during the same period last year.

Among the companies that received approvals this year are Cadila Healthcare (Zydus Cadila and its subsidiaries), Aurobindo Pharma, Lupin, Gland Pharma, and Glenmark. 

In comparison, the growth rate in drug approvals for non-Indian companies is lower at 15.27 per cent. From 216 approvals between January and June 2016, non-Indian companies received 249 approvals during the same period this year.

Some of these non-Indian companies are also promoted by Indians. Amneal Pharmaceuticals, founded in New Jersey in 2002 by the Patel family, has grown to be the seventh-largest generic manufacturer in the US by prescription volume. It is led by Chintu and Chirag Patel and has a presence in Australia, Europe and Asia. It received 20 drug approvals between January and June 2017. In India, it has a manufacturing site near Ahmedabad.

Ranjit Kapadia, analyst with Centrum Broking, said, "Indian companies have established a strong base in the US in the generic drugs space. They are competing among themselves for market share," he said.

Analysts also noted that Indian companies had made the most number of drug filings in the US. Moreover, the process of drug approvals has been expedited by the FDA. 

Gaurav Jain, vice-president and co-head, corporate sector ratings, ICRA, said, "In mid-2012, the Generic Drug User Fee Amendments (GDUFAs) were implemented to expedite the process of abbreviated new drug applications (ANDAs) approvals by the FDA. In October 2016, the GDUFA entered its cohort-five phase, in which the FDA has to act on 90 per cent of the ANDA submissions within 10 months."  

Compared to this in the cohort-four phase of the GDUFA, the FDA had to act on 75 per cent of the ANDAs submitted within 15 months. 

This is evident from the growth rate in drug approvals by the FDA so far this year. In 2017, the FDA has approved 390 ANDAs, up from 310 approvals between January and June 2016.

However, ICRA feels that the annual growth trajectory for the Indian pharmaceutical industry is likely to moderate to 7-10 per cent over 2017-18 to 2019-20. The momentum is likely to slow because of pricing pressure on the generic business.