As prices of generics slide, pharma firms shift focus to specialty drugs
NEW DELHI: Indian drug makers are shifting focus from their once lucrative generics medicines to specialty drugs amid continued price erosion in its biggest market, the US.
The focus on specialty medicines has been accelerated by measures taken by the Food and Drug Administration of the US (US FDA) to increase competition in generic medicines to bring down prices, experts said. Specialty drugs are high value prescription medications used to treat complex, chronic conditions such as cancer, rheumatoid arthritis, and multiple sclerosis.
The price erosion, caused by increased competition and channel consolidation in the US, has put pressure on Indian generic drug companies over the past few years to look at newer avenues, the experts said.
“With increased competition, price erosion and decline of Para 4 opportunities (patent challenges by generic drug makers) in the US market, leading Indian generics (companies) have been trying to plot a specialty play for the past couple of years," said Sujay Shetty, pharma practice leader for India and Asia Pacific at PwC.
“The journey is difficult as the dollar spends and the capabilities from R&D to marketing are of a much higher magnitude than the conventional oral solid dosage (OSD) type products. For Indian companies this is a must-win battle as we look at 2020 and beyond."
India’s largest drug maker Sun Pharmaceuticals Ltd is of the view that specialty medicines will drive medicine spending in the coming years.
“The share of specialty medicines in global spending in 2017 stood at 32%, up from 19% in 2007. In the US and EU5 markets(Germany, France, Italy, UK, and Spain), the contribution of specialty medicines to overall pharmaceutical spending has almost doubled over the preceding 10 years. This trend is likely to continue," a company spokesperson said.
Sun Pharma has a portfolio of around 10 specialty products, of which seven have already been commercialized. Indian firms have been working to create a pipeline of specialty drugs, innovative products and biosimilars by increasing investments in research and development through acquisitions.
“We have accelerated our innovation-led journey with key specialty investments in the US, where our aim is to satisfy unmet needs of patients and healthcare providers in the areas of movement disorders and the central nervous system (CNS), lung delivery of medicines (inhalation therapies), and respiratory illnesses besides hospital and institutionally administered products," said Umang Vohra, global managing director and chief executive officer, Cipla.
Several other institutional assets of Cipla are under late-stage evaluation as the company explores acquisition and in-licensing, said Vohra. “These moves are in keeping with our stated intention to build a specialty pipeline in the US market and reinforce Cipla’s innovation-led approach and commitment to caring for the life of patients," he said.
Glenmark also started building a pipeline of specialty products a few years ago.
A new drug application for the first specialty product from the company’s organic pipeline, Ryaltris, a treatment of seasonal allergic rhinitis, has been filed with the FDA and the product is likely to be launched in the first quarter of FY20.
Glenmark has signed pacts to commercialize Ryaltris in Australia and New Zealand with Seqirus and in South Korea with Yuhan Corp.
The pharma major has two other organically developed products in the pipeline, a biosimilar of Xolair (used to treat asthma) and a nebulised formulation of tiotropium (used in the management of chronic obstructive pulmonary disease).
“The specialty products’ space is very exciting and offers significant opportunities. Respiratory and dermatology are Glenmark’s stronghold and we are leveraging the capabilities in these therapy areas to build our specialty business in the US. We expect to launch our first specialty product Ryaltris in the US in FY20. We continue to invest in enhancing our pipeline and expect the specialty business to start contributing meaningfully to our US revenue in the next 2-5 years," said Glenn Saldanha, chairman and managing director of Glenmark Pharmaceuticals.