The US is the largest Healthcare market in the world. Drugs manufactured by Indian pharma companies account for a significant amount of the prescriptions filled in the US. But the big Indian players in the US market have not been able to drive significant returns for the past few years. Let us try to understand why:
Period of Rapid Growth (FY11-FY17)
During 2010 to 2017, Indian pharma companies saw a boom in the US business. Some of the reasons for this were:
- Lowest cost producer: Indian pharma companies were able to manufacture and sell drugs at very low costs due availability of cheap raw materials from China and availability of cheap labor. These companies gained massive scale and became incredibly efficient at manufacturing low cost medicines.
- Blockbuster drugs going off patent: Between 2012 and 2016, drugs with cumulative annual sales of approximately $100 billion went off patent. The Indian pharma companies were quick to cash in on this and were able to gain significant market share due to their low costs.
- Fewer regulatory issues: At the time, the US FDA did not have the resources to conduct extensive plant audits. As a result, the companies were able to get away with not maintaining the manufacturing plants as per the standards.
- Less Competition: Another side effect of the US FDA being short staffed was that they were not able to clear the backlog of ANDAs and more ANDAs kept piling up. As a result, fewer generic drugs were approved which resulted in less competition. The players that were already in the market enjoyed long periods with no price erosion.
- Fragmented buy side: At the time, there were over a dozen PBMs, who operated independently from insurance providers and hence had lesser power to negotiate lower prices with pharma companies.
Due to a combination of these factors, Indian pharma companies saw a period of rising revenues and surging profits. Revenues of the top Indian pharma companies grew at a CAGR of 27% during this period and profits grew by a CAGR of 18%.
Period of Consolidation (FY17 to present)
By 2017, the Indian companies had built massive scale due to all the factors mentioned above that were in their favor. But the business landscape changed dramatically post 2017, making it hard for companies to enjoy the same level of profitability. Some of the factors that were key to this downturn were:
- Increased costs: The implementation of Generic Drug User Fee Act (GDUFA) added additional costs to generic drug manufacturers. GDUFA fees are collected by the US FDA as a way to solve their lack of funding and manpower. Generic drug companies have to pay a fee for approval of ANDAs and a fee for every US FDA manufacturing facility they have. This added to the costs of selling drugs in the US.
- Increased competition: One of the stipulations under GDUFA was that the US FDA would clear the backlog of ANDAs and also approve ANDAs faster. As the US FDA cleared the backlog of ANDAs, the competition in molecules increased rapidly causing massive price erosion. It is now much easier for new competition to enter into a molecule.
- Increased regulatory requirements: GDUFA fees also enabled the US FDA to hire more manpower to conduct plant audits. They found massive violations at Indian plants and started issuing warning letters. In 2019, 46% of the warning letters issued by the US FDA were to Indian companies. Plant shutdowns led to idle costs and decreasing profitability for these companies.
- Volatile raw material costs: After a massive explosion in a chemical factory in China, the Chinese authorities started shutting down a lot of the API plants. This led to increased raw material costs for Indian formulation companies.
- Consolidation on buy side: There were massive M&As on the buy side which led to consolidation in the drug purchasing side in the US. PBM’s merged with insurance companies and pharmacy chains to vertically integrate their operations. There were about a dozen PBMs in the US prior to 2012 which later consolidated to mainly 3 big companies who control 90% of the drug buying in the US. This gave them massive negotiating power to lower drug prices.
So pharma companies faced the pressure on revenues from increased competition and consolidation and on costs by increased US FDA expenses and volatile raw materials. This has led to a period of decreased revenues and profitability where the combined profit for these firms is still not above FY17 levels.
The Future
There is most competition in oral solid dosage forms (tablets and capsules) as they are the easiest to manufacture. Their share in the overall product approvals has been decreasing in the past few years as Indian companies are focusing on other complex to manufacture dosage forms like injectable, solutions, gels, powders, lozenges, etc.
The next phase of growth for these companies is expected to come from complex generics, specialty generics and biosimilars. The R&D expenses and time required on these products are much higher. These products are under development and as they start receiving approvals, these companies are expected to deliver another leg of growth.
The Real Person!
The Real Person!
Acheter Kamagra site fiable: kamagra 100mg prix – kamagra livraison 24h
The Real Person!
The Real Person!
kamagra gel: kamagra pas cher – achat kamagra
Cialis sans ordonnance 24h: Cialis sans ordonnance 24h – cialis sans ordonnance tadalmed.shop
Tadalafil sans ordonnance en ligne: Tadalafil 20 mg prix sans ordonnance – Cialis sans ordonnance 24h tadalmed.shop
The Real Person!
The Real Person!
Cialis sans ordonnance 24h: Cialis generique prix – Achat Cialis en ligne fiable tadalmed.shop
pharmacie en ligne fiable: Meilleure pharmacie en ligne – п»їpharmacie en ligne france pharmafst.com
The Real Person!
The Real Person!
Pharmacie Internationale en ligne: Pharmacie en ligne France – Pharmacie en ligne livraison Europe pharmafst.com
The Real Person!
The Real Person!
Pharmacie Internationale en ligne: Pharmacie en ligne France – trouver un mГ©dicament en pharmacie pharmafst.com
The Real Person!
The Real Person!
cialis sans ordonnance: Cialis en ligne – Acheter Viagra Cialis sans ordonnance tadalmed.shop
The Real Person!
The Real Person!
achat kamagra: kamagra en ligne – kamagra livraison 24h
The Real Person!
The Real Person!
Achetez vos kamagra medicaments: Achetez vos kamagra medicaments – kamagra oral jelly
The Real Person!
The Real Person!
Cialis generique prix: cialis prix – cialis generique tadalmed.shop
The Real Person!
The Real Person!
pharmacie en ligne france fiable: pharmacie en ligne – Pharmacie sans ordonnance pharmafst.com
The Real Person!
The Real Person!
pharmacie en ligne france pas cher: Pharmacie en ligne France – Achat mГ©dicament en ligne fiable pharmafst.com
The Real Person!
The Real Person!
kamagra livraison 24h: Acheter Kamagra site fiable – acheter kamagra site fiable
The Real Person!
The Real Person!
Medicine From India: indian pharmacy online shopping – medicine courier from India to USA
The Real Person!
The Real Person!
canada pharmacy 24h: Express Rx Canada – canadian discount pharmacy
The Real Person!
The Real Person!
canadian neighbor pharmacy: Canadian pharmacy shipping to USA – canadian pharmacy world
The Real Person!
The Real Person!
canada pharmacy: canada drugs – canada drugs reviews
Rx Express Mexico RxExpressMexico mexico drug stores pharmacies
The Real Person!
The Real Person!
canada ed drugs: Generic drugs from Canada – best canadian pharmacy to buy from
mexico pharmacies prescription drugs: mexico drug stores pharmacies – RxExpressMexico
indian pharmacy indian pharmacy online indian pharmacy online shopping
The Real Person!
The Real Person!
mexico pharmacies prescription drugs: Rx Express Mexico – mexico drug stores pharmacies
canadian world pharmacy: best canadian online pharmacy – online canadian drugstore
Rx Express Mexico mexico pharmacy order online mexican rx online
The Real Person!
The Real Person!
mexican online pharmacy: buying from online mexican pharmacy – mexico drug stores pharmacies
canada drugs online: Generic drugs from Canada – canadian pharmacy service
The Real Person!
The Real Person!
Medicine From India: indian pharmacy – MedicineFromIndia
RxExpressMexico Rx Express Mexico RxExpressMexico
The Real Person!
The Real Person!
pin-up: pinup az – pin up az
The Real Person!
The Real Person!
pin up az: pin-up casino giris – pin up az
The Real Person!
The Real Person!
pin-up casino giris: pin up – pin up casino
The Real Person!
The Real Person!
вавада: вавада – вавада зеркало
The Real Person!
The Real Person!
пин ап казино официальный сайт: pin up вход – пинап казино
The Real Person!
The Real Person!
пинап казино: пин ап казино – пин ап казино
The Real Person!
The Real Person!
вавада: vavada – вавада казино
The Real Person!
The Real Person!
вавада: vavada вход – вавада
The Real Person!
The Real Person!
pin up azerbaycan: pin up azerbaycan – pin up
вавада: vavada – вавада казино
vavada casino: vavada вход – вавада зеркало
вавада зеркало: вавада зеркало – vavada
вавада: vavada вход – vavada вход
pinup az: pin-up casino giris – pin-up
пин ап вход: pin up вход – пин ап казино официальный сайт
вавада казино: vavada вход – vavada вход
Hi, i think that i saw you visited my website so i came to “return the
favor”.I’m trying to find things to enhance my website!I suppose its ok to use some
of your ideas!!
Feel free to visit my blog post: nordvpn coupons inspiresensation
пин ап вход: pin up вход – пин ап зеркало
пин ап казино официальный сайт: пин ап зеркало – пин ап казино
The Real Person!
The Real Person!
http://pinupaz.top/# pin-up
The Real Person!
The Real Person!
https://pinupaz.top/# pin up azerbaycan
The Real Person!
The Real Person!
safe modafinil purchase: modafinil pharmacy – Modafinil for sale
The Real Person!
The Real Person!
safe online pharmacy: discreet shipping – generic sildenafil 100mg
The Real Person!
The Real Person!
online Cialis pharmacy: online Cialis pharmacy – secure checkout ED drugs
The Real Person!
The Real Person!
buy generic Cialis online: secure checkout ED drugs – generic tadalafil
350fairfax nordvpn
I’ve been exploring for a little bit for any high quality
articles or blog posts on this sort of space . Exploring in Yahoo I finally stumbled upon this website.
Studying this info So i’m glad to express that I’ve a very good uncanny feeling I found
out exactly what I needed. I such a lot unquestionably will
make certain to don?t put out of your mind this
website and provides it a look on a continuing basis.
my homepage … nord vpn coupon codes
The Real Person!
The Real Person!
FDA approved generic Cialis: cheap Cialis online – cheap Cialis online
The Real Person!
The Real Person!
same-day Viagra shipping: cheap Viagra online – buy generic Viagra online
The Real Person!
The Real Person!
secure checkout ED drugs: cheap Cialis online – cheap Cialis online
The Real Person!
The Real Person!
best price for Viagra: cheap Viagra online – no doctor visit required
http://modafinilmd.store/# buy modafinil online
The Real Person!
The Real Person!
best price for Viagra: same-day Viagra shipping – trusted Viagra suppliers
FDA approved generic Cialis: cheap Cialis online – secure checkout ED drugs
http://maxviagramd.com/# secure checkout Viagra
The Real Person!
The Real Person!
fast Viagra delivery: trusted Viagra suppliers – generic sildenafil 100mg
FDA approved generic Cialis: order Cialis online no prescription – online Cialis pharmacy
https://zipgenericmd.com/# secure checkout ED drugs
The Real Person!
The Real Person!
discreet shipping: Viagra without prescription – generic sildenafil 100mg
same-day Viagra shipping: Viagra without prescription – safe online pharmacy
The Real Person!
The Real Person!
Modafinil for sale: doctor-reviewed advice – safe modafinil purchase
https://modafinilmd.store/# buy modafinil online
cheap Cialis online: order Cialis online no prescription – secure checkout ED drugs
The Real Person!
The Real Person!
safe online pharmacy: discreet shipping – legit Viagra online
The Real Person!
The Real Person!
Amo Health Care: Amo Health Care – Amo Health Care
The Real Person!
The Real Person!
can i get generic clomid pill: Clom Health – get generic clomid without rx
The Real Person!
The Real Person!
prednisone 50 mg buy: PredniHealth – PredniHealth
The Real Person!
The Real Person!
can you buy cheap clomid without dr prescription: Clom Health – cost cheap clomid without insurance
The Real Person!
The Real Person!
prednisone brand name in india: PredniHealth – where can you buy prednisone
mambo 36 tadalafil 20 mg reviews: cialis price walmart – canadian no prescription pharmacy cialis
cialis 20 mg from united kingdom: Tadal Access – generic cialis
online cialis no prescription: TadalAccess – cialis overnight deleivery
tadalafil medication: cialis sell – generic cialis tadalafil 20mg india
buy antibiotics from india: BiotPharm – antibiotic without presription
cheapest antibiotics: Biot Pharm – buy antibiotics for uti
Pharm Au 24: Online medication store Australia – pharmacy online australia
http://eropharmfast.com/# ed pills
get antibiotics quickly: BiotPharm – over the counter antibiotics
buy antibiotics: BiotPharm – Over the counter antibiotics pills
antibiotic without presription buy antibiotics online uk antibiotic without presription
buy antibiotics from india: BiotPharm – buy antibiotics over the counter
get antibiotics quickly: Over the counter antibiotics for infection – cheapest antibiotics
cheapest antibiotics: BiotPharm – buy antibiotics
http://eropharmfast.com/# ed prescription online
Ero Pharm Fast Ero Pharm Fast Ero Pharm Fast
over the counter antibiotics: buy antibiotics online uk – buy antibiotics over the counter
buy antibiotics from canada: BiotPharm – Over the counter antibiotics pills
https://pharmau24.shop/# online pharmacy australia
Online drugstore Australia: pharmacy online australia – online pharmacy australia
get ed meds today cheap ed medication ed online pharmacy
buy antibiotics for uti: Biot Pharm – buy antibiotics
http://pharmau24.com/# Medications online Australia
Buy medicine online Australia Online medication store Australia Online medication store Australia