The size of the global generic pharmaceuticals market was estimated at more than US$33 billion in 2000. US is the world's largest market for generics. The share of generic products in the prescription pharmaceutical market of the US has been increasing over the years. Generics accounted for 19 per cent of the US prescriptions pharmaceuticals market in volume terms in 1984 but this number increased to 47 per cent in 2000.
With some of the leading drugs going off patent in the near future and increasing preference for generics by managed care organizations, the US generics market and, therefore, the global generic pharmaceuticals market is expected to grow at a rate higher than the global pharmaceuticals industry. Some of the blockbuster drugs likely to go off-patent in the near future are Claritin (Loratidine of Schering Plough), Prilosec (Omeprazole of Astra-Zeneca), Augmentin (Potassium Clavulanate-API of GlaxoSmithKline), Neurontin (Gabapentin of Pfizer), Zestril (Lisinopril of AstraZeneca), Prinivil (Lisinopril of Merck), Taxol (Paclitaxel of Merck). According to IMS Health, a market research company, the world generics retail market is estimated to grow at a rate of 13 per cent per annum till 2005.
The generics market offers immense opportunities to the developing countries such as India, China, Korea, where the cost of production is low and the manpower costs are also relatively low. Quite a few Indian companies have aggressively filed Abbreviated New Drug Applications (ANDAs) in the US and have received approval for some of them. Some of the Indian companies who have successfully entered the generics market of the US and their product pipeline are as follows:
The other Indian pharmaceutical companies who have filed for ANDAs with the United States Food & Drug Administration (USFDA) include Lupin Limited and Morepen Laboratories Limited.
US Generics Market
Every developed country follows a particular process for granting a marketing authorisation to the generic manufacturer. In some West European countries and in Canada, the companies seeking permission to market a generic product need to file what is called a 'product dossier' with the respective regulatory authority. In the US, the manufacturer needs to seek an approval for an abbreviated new drug application (ANDA).
To increase generic drug availability, the US Government passed the Hatch-Waxman Act in 1984. The ANDA process for generic drug approval was created under this Act. This Act also permits the generics manufacturer to start drug development and even file ANDAs prior to the expiry of the patent on a product.
ANDA Application: When a company files an ANDA, it is not required to conduct clinical studies to prove the safety and efficacy of the drug (as required for a new drug application) but needs to prove the bio-equivalence of the generic, i.e., the generic product would have the same effect in the body as the original drug. The applicant seeking approval for generic products has to choose one of the following options for filing an ANDA with the USFDA
- Para I: The drug has not been patented
- Para II: The patent has already expired
- Para III: Date on which the patent will expire, and that the generic drug will not go on the market until that date passes or
- Para IV: Patent is not infringed upon or is not valid.
Para I filing is made for products for which the patent applicant has not submitted the required patent information and, Para II, for products whose patent has expired. Para III filing is made for a product where the USFDA approval is not sought until the patent with respect to that product has expired. Para IV filing is made for drugs whose patents are nearing expiry.
If the applicant believes that his product will not infringe the patents on the original drug, the applicant can make a certification to the holder of the patents on the drug for which the generic drug approval is being sought. The patentee may file a patent infringement law suit within 45 days of receiving such certification. This may stall the USFDA review process and also lead to patent infringement litigation.
Such patent infringement litigation may delay the USFDA approval of the ANDA for up to 30 months. During this 30-month period, the USFDA may grant the generic "approvable status", awaiting the litigation outcome, patent expiration or the end of the 30-month period. After 30 months, even if the litigation is not settled, the USFDA would review an 'approvable' ANDA, and if the generic meets USFDA specifications, the ANDA could be approved.
The USFDA provides 180-day marketing exclusivity to the first filer of an ANDA with a non-infringement certification under Para IV. Hence the first filer is protected from competition from other genetics for the 180-day period after either the first commercial marketing of the drug or the decision of a court holding the subject patent invalid.
US Senate passed a law that renews USFDA's paediatric exclusivity granting powers for a period of five more years. Further, the Paediatric Exclusivity Bill provides for marketing exclusivity for a period of six months only for pediatric doses. In other words, it permits USFDA to grant approvals to non-pediatric generic manufacturers even during the six-month paediatric exclusivity period.
Greater Access to Affordable Pharmaceuticals Bill of 2001 which was tabled in the US Senate in May 2001, seeks to amend the Food, Drugs and Cosmetics Act and provide for accelerated review of ANDA approval process. The Bill also has a provision to eliminate the 30-months stay triggered in case of filing of patent infringement suit.
- ICRA