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02/09/2021

Virtual roundtable: State of the generics industry

Sandra Levy
Senior Editor
Sandra Levy profile picture

As with many areas of the industry, the ongoing COVID-19 pandemic is another hurdle that generics companies must contend with, while also dealing with ongoing challenges that would occur in a normal year. Among the challenges that generics face in 2021 are the need to ensure a consistent supply of critical products, while also developing and launching new products, investing in development and manufacturing facilities, and making acquisitions that grow their pipelines — all while conducting business in a virtual environment.

To get a sense of what the generics industry is facing and how it plans to navigate 2021, Drug Store News has assembled a virtual roundtable of executives from leading generics firms. Their answers illuminate the spirit of the industry and its ability to adapt to deliver for their customers and patients

Drug Store News: What is the greatest challenge facing the industry?

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Eric Purcell, vice president of sales and marketing, Alembic Pharmaceuticals: The biggest challenge facing the industry continues to be reliable and consistent supply. COVID-19 and other factors have negatively impacted service levels in our industry. Continuing to provide critical medications to patients continues to be the most important and challenging job for manufacturers. This is particularly true for generic drug manufacturers who account for 90%-plus of medicines taken by patients in the United States each year. Supply is critically important to patients who rely on generic suppliers for high-quality medicines with consistent supply at an affordable price.

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Andy Boyer, executive vice president and chief commercial officer of generics, Amneal: As COVID-19 continues to threaten the country and our healthcare system, ensuring continuity of pharmaceutical product supply remains as the greatest challenge for manufacturers.

We are working collaboratively with the entire supply chain from API suppliers to dispensing customers — retail/institutional/wholesale/mail order — to prioritize our manufacturing forecasts based upon the needs of patients and our healthcare system.

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Daniel Carbery, president and CEO, Amring Pharmaceuticals: The largest challenge to the generic drug industry is the economic stability and supply reliability of the development and manufacturing companies. The global pandemic has accelerated and stressed the marketplace dynamics of intense price competition due to higher numbers of competitors and the realignment of the payer-
wholesaler-pharmacy channels.

Demand for certain categories of drugs have dropped significantly due to postponed medical treatments during the pandemic, while other drugs have suffered from quality or reliability of supply failures. The result may force a further consolidation of the generic manufacturers and a shift in product offerings, while simultaneously generating renewed interest in manufacturing assets closer to the U.S. market. In particular, sterile product manufacturing is taking on an even higher focus in the United States and Canada as sterile drug shortages become larger.

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John Dillaway, executive vice president, Ascend Labs: I think there are many challenges confronting the generic industry as we head into 2021, but given the continued presence of the COVID-19 virus, adjusting to a virtual environment stands out. Companies were quickly thrust into a no in-person interaction business model in 2020 and this will continue well into 2021 and possibly beyond. During this time, many trade organizations have shifted their meetings from in person to online, and companies have been challenged with the use of multiple group meeting platforms and the limitations and idiosyncrasies of each.

As we move through 2021, companies will continue to be challenged by several factors, including the varying timelines that they and their customers feel comfortable with in beginning to venture out in person; the continued proliferation of online meetings and varying platforms; and patient desires to be serviced without leaving their homes.

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Kon Ostaficiuk, president, Camber Pharmaceuticals: Maintaining a steady supply of lifesaving, affordable medicines to patients during the pandemic is certainly one of the greatest challenges the generics industry has ever faced. From APIs to manufacturing and supply chain, there is not an area that has not been adversely affected by COVID-19.

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Arunesh Verma, CEO, Cipla USA: The COVID-19 pandemic brought about disruption of supply chains, movement of workforce and markets. The nature of the pandemic also placed greater responsibility on the pharmaceutical sector to support the fight against COVID-19 and maintain continued manufacturing and uninterrupted supply of essential medication for all patients. At Cipla, we lay paramount importance on the health and safety of our employees at our manufacturing sites. As a responsible organization, we took all the necessary precautionary measures at our facilities, including screening, sanitization and appropriate steps towards social distancing.

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Marc Kikuchi, CEO of North America generics, Dr. Reddy’s Labs: The pharma industry in general, and generics manufacturers in particular, face an array of unprecedented challenges in the wake of the COVID-19 pandemic. One of the most problematic is the push by governments throughout the world to on shore API production and finished goods manufacturing. This global phenomenon, fueled by the rise of nationalism, will present unique challenges that generic pharma manufacturers — due to the sheer volume of product we produce — will be grappling with for years to come. Maintaining high-quality standards for API and finished drug forms in an ever-evolving, supply chain landscape is underpinned by the requirement for environmental preservation, resource availability and urgent need to deliver sustainable manufacturing. Because of this, we predict that sustaining the environment will become the No. 1 challenge to manufacturing and supply chain issues in the pharma industry over the next 10 to 20 years and beyond.

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Kristy Ronco, chief commercial officer of U.S. generics, Hikma: The COVID-19 pandemic remains a huge challenge for the industry. When the pandemic hit, Hikma was well prepared, and we took action quickly to meet the needs of customers and patients who rely on the high-quality medicines we make and distribute. Over the past 10 years, Hikma has invested hundreds of millions of dollars in building its U.S. and global manufacturing, distribution and service capabilities, and we were in a strong position for the start of this crisis. Our broad and well diversified product portfolio; high-quality, flexible manufacturing facilities; and a robust supply chain are enabling us to respond to the needs of our customers, healthcare providers and patients across the country.

More broadly, the industry continues to work on providing a strong and affordable supply of generic medicines that meet high quality standards Hikma was founded upon and the U.S. healthcare system expects. Our high-volume and state-of-the-art U.S. manufacturing facilities have an excellent record of FDA-quality inspections. Even before COVID-19, Congress had been looking at ways to improve the availability of high-quality generics manufactured in the United States, and we are well positioned to meet this need.

Drug shortages also remain an issue in the United States, as evidenced by the FDA’s recent report on this important topic. Hikma is working closely with FDA and others in the U.S. healthcare system to use our market knowledge and agile manufacturing capabilities to try and address shortages of essential medicines.

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Sun Pharmaceutical Industries (via a spokesperson): In the COVID-19 environment, the most significant challenge has been to ensure a consistent supply chain to ensure that the patients who depend on our medications continue to receive uninterrupted supply. Besides, the pressure on margins continues for the generic industry, partly due to customer (buyer) consolidation.

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Samuel Goodman, senior director of marketing, Unichem Pharmaceuticals: What is the greatest challenge of the industry? The industry’s supply chain continues to face disruptions due to COVID-19. We have experienced raw material shortages, transportation logistics hurdles, increased cost associated with manufacturing and distribution, intermittent COVID-19 case outbreaks, government-mandated shutdowns, and other difficult pandemic-related issues over the last nine months. As the nature of these disruptions evolve, our biggest challenge is to adapt and strengthen our supply chain to ensure continued patient access to lifesaving medications.

DSN: How do you plan to help customers and patients in 2021?
Purcell:
Alembic continues to be focused on reliable supply for its customers and the patients they serve. Supplying its customers and patients with medication they need in an expeditious manner provides tremendous value to them.

Alembic has continued to invest in product development and manufacturing facilities, which have resulted in tremendous growth. In 2021, Alembic anticipates launching 25-plus generic products, including its first medicines aimed at specialty and institutional markets. These new product offerings will provide new options to its customers and patients, and help to lower medication costs.

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Boyer: We’re increasing the velocity of innovation at Amneal, which provides patients affordable access to a greater number of complex and, otherwise, expensive drugs.
Our recent agreement to acquire Kashiv Specialty Pharmaceuticals, a wholly-owned subsidiary of Kashiv BioSciences focused on the development of complex generics, innovative drug delivery platforms and novel 505(b)(2) drugs is one example of how we will further amplify progress.

In the last quarter of 2020, we launched two transdermal systems (Lidocaine Patch 5% plus Lyllana estradiol transdermal system) and Acyclovir Cream 5%—all complex products—demonstrating our commitment to tackle more difficult formulations in need of generic alternatives.

Carbery: Amring’s mission since inception has been to provide quality and affordable niche generic medications on a consistent basis. We are uniquely designed to provide responsiveness and flexibility in investments in inventory and pipeline development versus having heavy infrastructure, such as manufacturing plants and equipment. This enables us ultimately to support our customers and patients with products that are in stock and available for dispensing even during global supply shortage and pandemic conditions.

Dillaway: The companies that can adjust to this changing environment will see success this year and moving ahead. Ascend has engaged on multiple platforms in an effort to make customers comfortable, using the platform of their choice for online meetings. We have also incorporated more virtual sales calls to replace in-person travel and have created a video attached to our website to maintain communication. Ascend also avails the service of its chief medical officer, a practicing primary care physician to patients who have medical questions or concerns.

While we hope that with a vaccine things will revert to our old normal, one can never be sure that some of the new normal holds on, so Ascend maintains a flexible position to service both customers and patients as quickly and responsibly as possible.

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Ostaficiuk: Camber will help customers in many ways in 2021, but one of the most important is to mitigate risk in the supply chain and keep a consistent flow of products to maintain critical service levels. The way Camber mitigates risks to customers is a multifaceted approach that includes the total efforts of our entire organization. Our track record shows that we have been very successful in that regard.

Camber’s risk management approach includes anticipating potential problems; promoting transparent communication with our customers; maintaining a strong supply chain and safety inventory; providing unparalleled customer service; and evaluating results and constantly improving our processes.

Our vertical manufacturing capabilities and facilities in both India and the United States ensure that we have a robust pipeline of raw materials to maintain excellent supply of all our products. Ongoing tech transfers between our India and United States facilities adds to our ability to quickly adapt to changes in the marketplace.

The health of our patients is Camber’s No. 1 priority and that means that we will concentrate all our efforts to avoid any product shortages whatsoever. Camber continues to introduce new, affordable medicines in a variety of therapeutic categories and has many product introductions scheduled for 2021.

Verma: Over six decades, Cipla has been researching the lungs, and this knowledge has resulted in Cipla being able to help millions across the world to breathe free. The FDA approval for generic albuterol sulfate HFA inhalation aerosol and the successful completion of the Phase 3 clinical study of generic Advair Diskus have strengthened our respiratory franchise in the U.S. market, furthering our aspirations of becoming the lung leaders of the world.

We envision continued traction in our new launches in respiratory and complex generics, namely albuterol inhalation, esomeprazole oral suspension and DHE nasal spray, supporting Cipla’s core portfolio. In September 2020, we received final approval for our ANDA for dimethyl fumarate DR capsules from the FDA.

We are favorably inclined towards strategic investments that will further strengthen our foothold in key markets like the United States. We will ensure continued investment in our U.S. manufacturing site in New York and focus on de-risking products by multiple manufacturing and API sites.

We will remain committed to ensuring that our pharmacy customers have the required finished goods required to support patients around the country.

In line with our overall philosophy of driving access and affordability, we will continue to maintain and launch co-pay assistance programs to support patients on select specialty products.

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Kikuchi: We think there are two important ways that Dr. Reddy’s can best help customers and patients in 2021. First, maintaining a strong pipeline to facilitate the launch of new products will continue to be important to all our stakeholders. A continuous stream of new product launches will provide customers and patients with more affordable options and enhance access to products and services that they need.

Second, we are committed to ensuring adequate supply by increasing our safety stock levels here in the United States to minimize any potential disruptions. During the pandemic, we doubled down on our commitment to customers and patients to deliver affordable medicines when they needed it most. Going forward, we will continue to be guided by our deep-rooted philosophy that “Good Health Can’t Wait.” As a leader in the pharmaceutical industry, we now have the ethical and moral imperative to accelerate access to much-needed medicines for people around the world. Our philosophy of “Good Health Can’t Wait” is guidance for our current behavior and inspiration for our future actions.

Ronco: We have a big role to play in helping Americans during the pandemic. While many await their turn for vaccination, Hikma remains committed to helping address the pandemic by using its significant R&D, manufacturing and distribution capabilities to provide high quality, affordable medicines to millions of patients across the U.S. healthcare system.

Sun: COVID-19 has taught us that our supply chain, quality and operations are resilient and flexible. Throughout 2020, we made significant strides in growing our portfolio and pipeline to provide the market with a robust offering of products. In 2021, we will continue to invest in quality, supply chain and inventory to ensure uninterrupted supply of safe and effective medications to patients and healthcare professionals. We are proud of our team’s ability to adapt to the immense strain on resources in the generic industry caused by COVID-19, and we have come out stronger because of it.

Goodman: We are doubling our manufacturing capacity in 2021 so that we will be able to maintain a consistent service level of close to 100% to our customers in 2021, and to support the exciting launches of many new generic medications by Unichem. We also plan to work more closely with our customers to identify and ameliorate market shortages as quickly as possible.

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