The USFDA recently is-sued a guideline titled product Launch Notification under Section 506I. The guideline instructs companies to let the USFDA know if a product is not launched even after 180 days of getting approval. USFDA felt the need to issue this guideline on product launch since data shows that only about 40 per cent of generic products are getting launched after USFDA approval within a year. This means about 60 per cent of products are not getting launched after USFDA approval even after a year. The data also shows that even after five years about 30 per cent of products are not getting launched. Pharma companies spend a lot of money on development, bio studies, filing of product and pay GDUFA fees. Then, why are the products not launched even after approval? The answer is that there are way too many competitors marketing the same product thereby reducing the scope of marketing or the cost of the product is prohibitive to selling the product at a competitive price.
Essentially two developments have happened in the last couple of years:
1. The USFDA stepped up approval of products by introducing GDUFA and inducted a lot of new inspectors/reviewers to clear the backlogs of approval. From a backlog of more than 36 months once, one can expect approval of new product now in 12-14 months if the quality of filing and data is acceptable. This helped in more generic products getting approval, throwing the US market into intense competition.
2. The market consolidated in the US and from about 10-12 buyers, today about 90 per cent of buying are controlled effectively by three buyers only, namely – Red Oak, Walgreen- Boots Alliance & McKesson. This means the buyers have now very high bargaining power bringing price pressure on marketed products. It is now a win-win situation for both, the government and consumers in the US.
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