The Generic Drug Market is Exploding As Consumers Realize a Designer Logo

Posted: August 23, 2021

API Manufacturing and Pharmaceutical Manufacturing

According to market research firm Acumen, the generic drugs market is expected to reach approximately $627.6 billion by 2027, thanks to increased R&D, a rise in healthcare spend, a growing number of individuals with chronic diseases and the U.S. government’s focus on curbing rising drug costs.

Once the patent expires on a brand-name drug product, it is eligible to be made into a generic drug. To do this, the generic drug manufacturer must ensure that the drug it is producing contains the same active pharmaceutical ingredients (APIs) as the brand-name product, in the same dose or concentration, and for the same route of administration. The generic drug, however, may differ in color, shape, taste, inactive ingredients, preservatives and packaging.

Generics are the bioequivalent of branded medications that have expired their patents but typically less expensive than their branded counterparts, since they don’t require the same research and testing, as well as marketing costs. Generics are identified as unbranded and branded. Unbranded generics have been more popular because of their lower cost, but branded generics are drugs sold by branded pharma firms but are no longer protected under a patent.

Generics have played a major role in bringing critical drugs to the individuals who need them the most, as well as lowering costs for insurance providers. According to the FDA, generic medications can cost close to 80 percent less than the brand-name equivalents. Brand-name drugs are typically more expensive because of the higher initial costs to develop, market, and sell a brand-new drug.

Government Support of Generics

In recognition of the growing role of generics, The FDA created the Drug Competition Action Plan in 2017 to help remove the barriers to generic drug development. Through the Act, it’s also committed to bringing greater transparency to the generic drug review and approval process in order to ensure more approvals and improve the quality of Abbreviated New Drug Applications (ANDAs) submitted for approval. It’s also implementing initiatives to update its own review process “to improve the speed and predictability of the generic drug review process while maintaining rigorous scientific standards.”

Challenges for Non-Branded Generics

While the FDA is putting measures in place to level the playing field for generic drugs, it still can be an uphill battle – especially when developing niche drugs to address highly specific diseases. The total market is often too small to justify the costs to comply with the latest and ever-growing FDA requirements and to compete with the marketing prowess behind larger firms.

Another challenge is the cost to source raw materials, since often, larger firms purchase in larger quantities and have the buying power to support long-standing supplier relationships. 

Yet, as generic drug makers turn to overseas manufacturers to help keep costs down, increasingly more stringent and warranted FDA regulations of overseas plants make it difficult and expensive to justify costs. and specialized equipment can stifle progress. Even as the FDA opens up the barriers to entry for generics, consolidation in the industry could occur from this host of new players.  Also, as patents expire, the generic drug market could have fewer players competing for sales and once again costs could climb.

Shoring Up the Generics Supply Chain

COVID-19 has exposed how much the U.S. relies  on India and China to ensure low costs for generic drugs. One of the ways generics can be developed more affordably is because of the offshoring of some manufacturing.  But we’ve learned that during times of crisis and disrupted supply chains, this strategy is not reliable. While manufacturing generics closer to home would help ensure that essential drugs are available where and when they are needed, this also would lead to rising costs that may be passed on to patients.

The key to balancing safety, quality, cost and predictability in generic drug development lies in working with an experienced CDMO.  Here at Seqens CDMO North America, we have the expertise, equipment and cGMP capabilities in generic drug manufacturing that can ensure success.  For example, one complex project required 27 chemistry steps, to synthetically produce a compound thought to have therapeutic value, which occurs naturally in a marine environment.  Although possible to harvest the material from natural sources, that process proved too difficult and too costly.  Synthesizing it was the only viable option, and the sponsor turned to Seqens NA .

TECH TRANSFER

Forward-looking CDMOs are preparing for the return of complex generic drug substance manufacturing  and it’s important to consider the CDMO’s experience with complex APIs, its infrastructure of equipment, cGMP suites and plants and sound project management that delivers projects on time and on budget.

Generic alternatives to brand-names occur in a variety of industries where the cost of goods would be prohibitive otherwise.  Nowhere, however, is it more critical than in drug manufacturing where a person’s health or life could be at stake. Thanks to rigorous quality controls and healthy competition, generics are meeting a critical goal of delivering vital drugs more cost-effectively and as safely and effectively as the shiny brand-names.

Contact us at (978) 462-5555 or email us at info@pcisynthesis.com to learn more about our state-of-the-art cGMP-compliant facilities for the manufacture of generic APIs.