Indian Pharmaceutical Companies: Adjusting to Emerging Realities in US market
September 15, 2013: The attractiveness of Para-IV opportunities and the number of mega patent expiries will fall in 2013-14. Para-IV filings has been affected by declining innovator pipeline (particularly blockbuster drugs) which is also reflected by regulatory approval trends in the US. The opportunity size of Para-IV filings has fallen from a peak $24 billion in CY2007 to $3 billion in CY2012. The macro environment for filings is expected to get more challenging in the future.
A similar trend has also been observed for molecules with brand size between $500 million and $1 billion, the opportunity for which reached its peak in 2007 and has been declining since then. Analysts expect the next phase of Para-IV filings would focus on molecules with brand sales of under $500 million.
Companies like Dr Reddy's, Ranbaxy, Glenmark, Zydus, Cadila have been preparing strategies to counter the situation. They have been working on diversified R&D model including complex, high value generics along with complex super-generics, nanotech and new drug delivery systems (NDDS) drugs which have a high value in the US market and face less competition. Concentration on niche segments, products with higher level of complexity, technology and delivery system-based products have enabled companies to build a sustainable US portfolio.
Diversification of business models along with cutting edge in-house research have been key factors behind the sustained efforts of pharmaceutical companies to adjust to the emerging realities in the US market.