Generics makers look to keep offerings competitive, affordable

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Generics makers look to keep offerings competitive, affordable

By Sandra Levy - 08/21/2018
What do consumers think about when talking about prescription drugs? More often than not, many say it is how much they pay for these products and what they can do to secure needed prescriptions, while not breaking the bank.

Retailers get it, it seems. Noting that generics have been shown to increase patient compliance and quality of care, thereby boosting pharmacies’ bottom line, and decreasing overall healthcare costs, many are looking to increase consumer awareness of these alternatives.

Several findings from The Association for Accessible Medicines’ recently released “Generic Access and Savings Report in the U.S 2018” support the fact that patients are more likely to pick up generic prescriptions from retailers than they are brand-name drugs. In fact, although brand-name products make up about 20% of approved drug claims, they account for about 40% of all abandoned claims. Specifically, 20.5% of brand-name prescriptions are abandoned, compared with 7.7% of generics, the report said.

Retailers who turn to lower-priced generics can boost their bottom line through improved adherence and increase the quality of patient care, but they should consider how manufacturers are meeting challenges in the generic market today.

One of the greatest challenges the generics industry has been facing is a product supply shortage that has been caused by a number of generics companies exiting the industry. To ensure adequate supply of their products, many generics companies are increasing their capacity in the United States, as well as in other countries where they have manufacturing plants.

Still others are building new plants with greater capacity.

“Generics, by nature, is a deflationary business, so prices for the most part keep going down, and some of these companies have gotten to the point where they said, ‘We’re going to exit certain products’ — some of which are key products — because it’s not practical anymore,” said John Dillaway, executive vice president of Ascend Pharmaceuticals. “Supply in today’s environment is the most important factor because retailers can’t sell what they don’t have.”

In order to ensure that Ascend can meet retailers’ demands, the company, which produces about a half a billion tablets or capsules a month, recently doubled its physical manufacturing capacity.

Camber Pharmaceuticals president Kon Ostaficiuk pointed out that such vertically integrated companies as Camber that manufacture their own active pharmaceutical ingredients will have a better chance of watching all aspects of the manufacturing process to ensure that customer terms and the shipment of all contracted medications are met.

Forecasting customers’ needs and investing in inventory also are critical if generic companies are going to meet retailers’ supply needs, because once a shortage occurs, it takes a considerably long time from ramp up to actual production. For example, when Maple Grove, Minn.-based Upsher-Smith Labs launches a product, it invests heavily in inventory because the company doesn’t want to risk a product shortage, according to the company’s vice president of partner relations Mike McBride.

“We work carefully with our customers to forecast their needs and make sure we can consistently meet their demand,” McBride said. “We work with our downstream suppliers of our ingredients to make sure we have sufficient supply to meet the long-term demand we’re anticipating.”

Jinping McCormick, Dr. Reddy’s Laboratories’ vice president of sales and marketing, retail Rx products, agreed that being able to provide retailers with a consistent supply of generics is essential.

Dr. Reddy’s continues to invest in and expand its manufacturing capability, adding new facilities in India and using roughly 12% to 13% of its revenue for research and development, McCormick said. These efforts are part of its recent efforts to expand from oral solids to topicals and injectables in different therapeutic categories, as well as different dosage forms.

“It speaks to the breadth and depth of our portfolio offerings, as well as the company’s capability. We have 70% to 80% of our products in oral solids,” McCormick said. ”We supply simple to fairly complex, difficult to manufacture products, such as in the cardiovascular area, where we have atorvastatin to manage cholesterol, and the antiviral valganciclovir.”

Some generics manufacturers have had product quality issues, and these can translate to a loss in revenue for retailers. Generic pills or tablets that crack because they are not of the highest quality must be discarded, and that can put a dent in a pharmacy’s revenues. For instance, if a retailer buys a bottle of 100 or 500 pills and as little as five pills are chipped or cracked, these pills can’t be dispensed. “They are not getting their full value on their purchase,” Dillaway said.

Ostaficiuk maintained that generic manufacturers who do not provide quality products are a drag on the retail pharmacy industry. “The threats in our business are the generic manufacturers that are not as established who make promises that they can’t keep and offer pricing in the market only to gain market share versus offering quality products at a reasonable price where the consumer benefits from not having to take higher priced nongeneric products,” he said.

Companies that develop and offer innovative generic products that are first to market provide reassurance to retailers that they are striving to produce quality products to meet retailers’ and their patients’ needs.

Upsher-Smith’s McBride said, “We choose our products more selectively, opting for those where we believe might be able to add value. We’ve had a couple of products that literally were the first products on the market after patents expired 15 years earlier. This meant that it was difficult to show bioequivalence. Yet we took the challenge and worked with the Food and Drug Administration to bring these products to market.”

Upsher-Smith’s generic portfolio includes several 505(b) (2) products, which the company was able to bring to market by demonstrating innovation to improve existing molecules.

“While these products have provided some new and interesting innovation, some of them also provided the first cost-effective therapies to products that existed,” McBride said. “One that remains in our portfolio is Vandazole, even though generics exist for the innovator product. We provided cost savings to pharmacists, payers and patients well ahead of ANDA generic competitors.”

Upsher-Smith also launched a testosterone product line that was a cost-effective alternative to products on the market at that time. Such products — lower-cost versions of drugs with few or no generics on the market — are the focus of the FDA’s Generic Drug Action Plan, which, among other efforts, is focused on highlighting drugs with three or fewer generics, offering manufacturers a faster approval pathway for their alternatives.

Speeding up the approval of complex generic products — which include drugs with complex active ingredients and complex drug-device combination products — also is of interest to the FDA. The agency has issued a draft guidance to assist manufacturers submitting abbreviated new drug applications for complex generics in creating and submitting preliminary requirements.

This has been a boon for manufacturers looking more into the specialty and complex space, among them Mahwah, N.J.-based Glenmark Pharmaceuticals. “In our ANDA pipeline, we have injectables and some drug-device combinations,” said Glenmark’s president of North American and global API Robert Matsuk, emphasizing that generic product research and development provides good experience in developing more complex products. “We’re getting into more complex products and that’s how our portfolio is going to evolve, and complementary to that, we’re building a complete innovative pipeline.”

Matsuk said Glenmark has at least six in