June 21, 2012 12:37 IST All
generic pharmaceutical companies, including Ranbaxy Laboratories [ Get Quote ],
Cipla, Dr Reddy's Laboratories, Lupin, Glenmark [ Get Quote ] and Torrent [ Get
Quote ] Pharma, might soon have to pay a fee to the US drug regulator when they
seek its permission to sell their products there. America is the world's largest drug
market. A Generic Drug User Fee Act is on the way, to enable the US Food and
Drugs Administration to levy a user fee of around $100,000 on each generic drug
application filed for approval, it is learnt. The new norms are likely to be
introduced from October. The regulator might also impose a fee for
re-inspection of FDA-approved facilities abroad and on Drug Master Files that
are generally filed by pharmaceutical companies with detailed information about
facilities, products and processes, according to an industry representative. Currently,
the FDA does not charge any fee for generic drug applications, also known as
Abbreviated New Drug Applications. However, under the present law or the
Prescription Drug User Fee Act, the regulator collects a fee from companies for
any newly innovated medicine. While the move is expected to have a financial
impact on generic drug makers, analysts suggest it would also benefit
companies, with faster approvals. "Our preliminary calculations suggest
the levy is likely to cause a fairly nominal financial impact (less than
$100,000 per ANDA filing) for generics filers. "However, generics players
will benefit greatly by significantly accelerated review of filings in the
medium term," analysts from IDFC [ Get Quote ] Securities said. The
proposed generic user fee is expected to give Federal Drug Administration the
additional resources required to expedite and improve the review of drugs. Currently,
it takes the regulator an average of 30 months to review an application; it
aims to reduce the review time to 10 months by 2017, a source said. According
to estimates of IDFC Securities, once the proposed law goes through, it could
earn the FDA an additional $299 million per annum from generic makers. Of this,
30 per cent is likely to come from processing of ANDAs and DMFs, and the rest
from its inspection of various facilities. However, some other sources said the
user fee for generic drug applications might vary, depending on the product's
market size. Once in place, the new law is also likely to increase the
frequency of re-inspections and audits of facilities abroad by the FDA. India [ Images ] has, outside the US ,
the largest number of FDA-approved manufacturing units. The development is also
significant as a large number of Indian companies are targeting various generic
launches in the US ,
in the wake of expiring patents. The US
generic market, 70-75 per cent of the total US pharmaceutical market, is
currently estimated to be at $350 billion and seen to grow at three to five per
cent yearly. Sales by Indian companies make up around 10 per cent of the US
market. About 1,000 generic applications are filed in the US market every year by Indian drug
companies. In 2011, the ANDA fillings in the US went up to 946, against 793 in 2006. This led to a sharp increase in
the backlog of processing ANDAs. Analyst estimates show 2,696 generic drug
applications were pending with the FDA as of December 2011, as compared to 1,216 in December 2006.
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