At a time when a number of Indian drugmakers have come under the US Food and Drug Administration (FDA) sanctions due to quality-control issues at their manufacturing plants, Indian pharma firms are also witnessing a slowdown in launching of new drugs as the agency increases scrutiny of generic companies.
“The new drugs are approved as per the guidelines and requirements specified in Rule 122A, 122B, 122D, 122E and Schedule Y of Drugs and Cosmetics Rules, 1945… There has been a slowing down in the number of new drug molecules approved by the CDSCO. The launching of new drugs are done by the manufacturing companies taking into consideration all aspects including their business interest,” an official with the Ministry of Chemicals and Fertilizers said.
Data from CDSCO indicates that since the year 2011, when a total of 41 new drug molecules were approved, the number has dwindled down since, with a minor pick-up last year. The CDSCO has cleared 11 new drug molecules till end-June 2015, according to the data. Growth in US sales of Indian drugmakers also slowed to 14 per cent in the year to March 2015, which is less than half of what it was in the year to March 2012, according to brokerage Edelweiss.
The pharmaceutical industry, though, is projected to see sales accelerate in the second half of the year, thanks to a pickup in the pace of US approvals for new drugs. Analysts say a jump in approvals by FDA for companies such as Lupin Ltd and Glenmark Pharmaceuticals Ltd could result in improved sales in the United States, and therefore a promising end to the fiscal ending March 2016. According to analysts at Bank of America Merrill Lynch, 75 approvals were granted to Indian companies between April and September 2015, compared with 72 in the year to March 2015.
“The recent approvals should improve growth for most companies, especially Dr Reddy’s and Lupin, from the third quarter,” Jefferies analysts wrote in a note late last month. “But for growth to revert to expected levels, further improvement in approvals is required.” Several Indian drugmakers have faced FDA sanctions in the last few years, due to quality-control issues at their manufacturing plants.
Industry lobby group Assocham points to the desperate need for Indian pharmaceuticals companies to diversify their product range and focus on evolving as innovators as growth in generic market is expected to slow down over the next decade. According to an Assocham study released earlier this year, revenues of innovative large global drug companies depend on the performance of their unique new discoveries which help them bag a patent. “Hence, the research and development (R&D) productivity of such players is of critical importance and accordingly, they invest heavily in R&D,” it said.
While new drug formulations are said to be leading the growth, the study said drug development costs have escalated. “The cost for developing a New Molecular Entity (NME) has more than doubled to $1.5 billion over the past 5 years. During the same period, the number of NMEs approved by the US FDA continued to hover around 15-20 with an occasional rise to over 20 as seen in 2004 and 2008,” it said. Interestingly, the study revealed that none of the new drugs approved over the past 2-3 years have been blockbusters with sales over $1 billion or even greater than $750 million.
* No of new drug molecules (Non-biologicals and biologicals) approved by Central Drugs Standard Control Organization during 2011 to 2015 (till June 30) in the country