USA Generic Medicines Market: Drivers & Restraints
While generic drugs play a major role in driving healthcare in the United States, the market is being adversely impacted by the higher pricing of the products, lack of awareness of generics, and the stringent regulations related to the manufacturing of generic drugs. The cost of the generic medicines, compared to branded versions, increases the profitability of the manufacturer. The prices of generic medicines are affected by several factors, such as the manufacturing costs, distribution costs, and the proportion of active ingredient or active pharmaceutical ingredient in the product.
In addition to the price difference, there are challenges associated with the generic market in the United States. The approval process is much lengthy, so manufacturers incur heavy financial losses to develop a generic medicine. Further, competition in the generic market is intense, leading to lower prices for generic drugs.
Generic Drugs Market: Segmentation
Based on indication, the global generic drugs market can be divided into dermatology, neurology, oncology, cardiology, gastrointestinal tract, respiratory tract, autoimmune disease, infections, anti-infectives, endocrinology, and others. In terms of distribution channel, the global generic drugs market can be categorized into retail pharmacies, hospital pharmacies, mail order pharmacies, e-pharmacies, and others. The hospital pharmacies segment is expected to account for the largest share of the market. The hospital pharmacies segment is expected to expand at a significant CAGR from 2017 to 2025. This is attributed to the greater penetration of retail pharmacies than hospitals and the rising trend of pharmacies outside of hospitals.
Geographically, the global generic drugs market can be divided into North America, Latin America, Europe, Asia Pacific, and Middle East & Africa. North America dominates the global generic drugs market due to the presence of a large number of generic drug manufacturers. Key players in the generic drugs market are Mylan N.V., Lupin, Sun
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Indian generic Medicines & Healthcare Products Regulatory Authority (MHRA) has called for compounding companies in India to license their products and ingredients to four manufacturing units in Australia and New Zealand to comply with the new definition of active pharmaceutical ingredient (API). The four countries have imposed the same rules which the Indian authority is likely to ask pharma companies in India to follow. However, the exact timing of such action is yet to be ascertained.
On 26 November, India's Ministry of Health and Family Welfare has proposed that compounding should not be allowed to be used for the manufacture of generics after a new definition of APIs was notified in India and other countries.
The new definition which came into effect from 1 January 2017 has specified that API can be identified by the global position on a tax stamp and only if the drug is declared as safe and effective for therapeutic use in any country. This has led to the formulation of compounding standards by individual countries and the MHRA is enforcing it through its international licensing agreements with pharma companies.
The new standards from the Australian and New Zealand governments are the key determinants for the licensing of API for manufacture of generic drugs and the Indian regulators have called for compounding companies to get themselves licenced. The guidance from the MHRA states that generic drug manufacturers have an obligation to ensure that their APIs are in compliance with the new standards, besides the national guidelines.
However, according to the Indian regulator, APIs to be issued from the four licensees in Australia and New Zealand would be kept confidential. This means that the companies will be required to disclose the data only in response to requests for data by the regulator. In case there is any dispute, all parties will need to get an independent third party to resolve it. The previous two-year period has also been increased to five years for filing of compounding requests and companies which do not comply would have to stop manufacturing generic drugs for the Indian market.
Speaking to a select group of reporters after the meeting, Harshdeep Kamble, chairman of MHRA, said that the Indian regulator is exploring the new regulations and that the existing compounding standards for sale of APIs in India are also being reviewed.
Further, the existing compounding companies in India need to apply for licensing to manufacture APIs under the new regulations, he said. Kamble added that after the new regulations have come into effect, India will have a central licensing authority in place to give licenses to these compounding companies. "This will not only reduce the burden on the Indian health regulator but will also prevent the cost of labelling. This is one of the reasons for having a central licensing authority in place in India," he said.
He added that the new regulations from Australia and New Zealand will be applied to the existing compounding businesses in India and those companies which are importing APIs will have to follow the new regulations. "Our recommendations would be taken into account and if they are implemented, we would become more competitive with regard to APIs," he said.
Indian Generic Medicines
The new requirements for compounding companies could be a costly exercise for the firms since it would increase the turnaround time of APIs, Kamble said.
While the costs would go up for the existing compounding companies, Kamble said that the licensing of these companies would give them access to the global market and help them expand into the export market.
"The bigger challenge in India is the length of the drug approval process. This means that the number of new products coming to India is very limited because in many cases the drug approval is delayed for over five years and we are not even able to produce a generic drug," he said.
The officials from both the countries.
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