Indian pharmaceutical firms must brace for more price erosion in the U.S. generic market due to a “sharp surge” in new drug approvals, according to Credit Suisse.
Abbreviated New Drug Approvals by the U.S. Food and Drug Administration are up over 30 percent over 2016 and 40 percent in the last two months, analyst Anubhav Aggarwal wrote in a note to clients. “But more approvals are yet to come and we stay negative,” Aggarwal added.
There are four reasons why the approvals are likely to increase going forward, according to Credit Suisse:
FDA has more resources now.
FDA now is focusing on increasing productivity by reducing iterations.
Around 8 percent of facilities have a warning letter and not yet adding to approvals.
Backlog queue is still expanding, and as the FDA starts clearing the backlog, approvals should pick up.
Faster approvals will hit Indian drugmakers due to four reasons, said the brokerage:
Close to 30 percent of approvals are going to new entrants.
The FDA is changing priorities from number of approvals to impact of approvals.
Risk for high margin drugs is high with approval timelines reducing from 40 plus months to 15-18 months.
More will update soon!!
