Favorable Outlook for Generic APIs - Pharmaceutical Technology

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Favorable Outlook for Generic APIs
A spate of drugs are scheduled to come off patent, offering vast potential and competition.

Pharmaceutical Technology

Teva Pharmaceutical. In 2006, Teva Pharmaceutical Industries (Petach Tikva, Israel) acquired the generic drug manufacturer Ivax Corporation. The move followed Teva's acquisition of Sicor in 2004. In addition to building Teva's position in generic drugs, these moves also enhanced Teva's position in APIs. Teva gained 30 additional APIs with the Ivax acquisition. Teva operates 18 API manufacturing sites and offers approximately 250 different APIs. In 2006, approximately 56% of the sales from Teva's API business provided APIs for Teva's generic drugs, and the balance was to third-party businesses.

Teva's API division has expertise in specialized technologies, such as fermentation processes, high-potency APIs, and peptide-based APIs. The company says these capabilities enabled its API division to support launches of pravastatin and simvastatin in the US in 2006 and to establish a position in the sale of fermentation products such as lovastatin, simvastatin, pravastatin and tobramycin.

Watson Pharmaceuticals . Watson Pharmaceuticals (Corona, CA), which acquired Andrx Corporation (Miami, FL) for roughly $1.9 billion in 2006, is also leveraging offshore manufacturing assets in its generics business.

During 2006, Watson continued its generic product-development alliance with Cipla Ltd. (Mumbia, India). Under the terms of the agreement, Watson is responsible for conducting bioequivalence studies, pursuing regulatory approvals for all developed products, and has exclusive US marketing rights for the products. Cipla is responsible for development and manufacturing of products.

In 2006, Watson acquired Sekhsaria Chemicals, Ltd. (Mumbai, India), which provides API and finished-dosage formulation expertise. Watson also increased its investment in Scinopharm Taiwan, Ltd. (Shan-Hua, Taiwan), a company specializing in the development and manufacture of APIs. In December 2005, Watson acquired a solid-dosage manufacturing facility in Goa, India.

Barr Laboratories. Barr Laboratories (Woodcliff Lake, NJ) acquired Pliva (Zagreb, Croatia) for approximately $2.4 billion in 2006, which positions the company in European markets and also provides it with low-cost production and research and development (R&D) facilities. With the Pliva acquisition, Barr acquired a bio-study R&D center in Goa, India, and gained access to manufacturing capabilities in Croatia, Poland, and the Czech Republic. Croatia is the site of Barr's European operations headquarters, where it has manufacturing, R&D, biopharmaceutical, and API facilities. The company also has R&D and manufacturing facilities in Poland and the Czech Republic.

API import issues emerge

As the supply lines for generic APIs extend offshore, particularly to India and China, certain industry groups are raising concerns over the level of inspections at foreign manufacturing facilities. Last fall, the Synthetic Organic Chemical Manufacturers Association (SOCMA, Washington, DC) and the European Fine Chemicals Group (EFCG, Brussels) teamed up to urge US and European regulatory authorities to increase inspections of foreign manufacturing facilities of APIs (3). Joseph Acker, president of SOCMA, and Guy Villax, chairman of EFCG's Pharmaceuticals Business Committee, commented on key issues in a joint press release last October.

The move followed the submission of a citizen petition to FDA by SOCMA's Bulk Pharmaceuticals Task Force, asking the agency to increase inspections of drug-manufacturing facilities located outside of the US (3). SOCMA is the US trade association representing chemical batch and custom manufacturers.

The EFCG has taken an active role in raising concerns over the preparedness of European Union (EU) and European national regulatory authorities in implementing recent EU legislation that requires all medicines marketed in the EU be made with APIs that comply with harmonized good manufacturing practices by the International Conference on Harmonization. EFCG had drawn attention to the need for increasing resources for foreign inspection and improving enforcement measures by EU and national authorities (4, 5). EFCG was formed in 2004 to address the growth and competitiveness of European fine-chemical companies and is part of the European Chemical Industry Council (Brussels) (5).


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