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What is the state of the generics industry?

In the face of challenges, the generics industry has continued to adapt to serve customers and patients.
Sandra Levy
Senior Editor
Levy

The Association for Accessible Medicines recently released its 2023 U.S. Generic & Biosimilar Medicines Saving Report, highlighting the value of generic and biosimilar medicines. The report noted that the U.S. healthcare system—including patients, employers and taxpayers—saved $408 billion in 2022 by using FDA-approved generic and biosimilar drugs.

At the same time, AAM pointed out that “it is critical not to take these savings for granted, as growing challenges to a sustainable future for generic and biosimilar competition continue to rise.”

Indeed, the generics industry faces myriad challenges, including the need to ensure a consistent supply of critical products, pressure on margins, deflation and port staffing issues, while also developing and launching new products.

To understand what the generics industry is facing and how it plans to catapult ahead, Drug Store News called up executives from leading generics firms to share their views on the state of the generics industry. Their answers shed light on the tenaciousness of the industry and its ability to go the extra mile to serve their customers and patients.

andy boyer

Amneal Pharmaceuticals

Andy Boyer
executive vice president, chief commercial officer—generics

As a global diversified pharmaceuticals company, we work with a wide array of customers—from the largest to the smallest—to provide patients with high quality, affordable medicines. In terms of the biggest challenges broadly facing the industry today, there are chronic supply shortages, including essential medicines that serve as the backbone of the U.S. pharmaceutical industry. Continued pressure on generic margins by the healthcare industry has left many manufacturers with little choice but to discontinue unprofitable products and reduce R&D spend in the U.S. in favor of more complex products and investment elsewhere. These economic pressures have been a key contributing factor for chronic drug shortages in the market.

john dillaway

Ascend Labs

John Dillaway
executive vice president

The greatest challenges facing the generic industry continue to be dealing with shortages and the unprecedented deflation that has dominated the industry over the past three years in particular. The two issues are well intertwined with one another. Too many approvals competing for too few positions has created an unbalanced model which has led to dramatic deflation and in many cases decisions to exit molecules which can then lead to product shortages. The financial impact is worsened then by service level penalties, the combined effects of which are now starting to cause casualties among manufacturers. These events will continue until solutions emerge.

paul mcmahon

Aurobindo Pharma USA

Paul McMahon
president, oral solids division

Some challenges that were out of our control included port staffing issues, container availability and air and sea freight capabilities, etc. The global supply chain crisis, with shortages affecting every industry, has forced us to look at new strategies to adapt to alternative materials procurement and transportation methods. After three years of COVID, the industry has been severely impacted, and demand dislocation has been difficult to predict, most recently resulting in the current antibiotics shortage due to the higher than anticipated cough/cold/flu season. In addition, stepped up facility inspections by the FDA has created some supply disruption. On top of that, inflation has been affecting many industries across the nation, however, generics is one of the few industries that is experiencing deflation, which is not a sustainable trend for the business.

Despite these challenges, Aurobindo has been able to leverage a strong vertically integrated supply chain where there is less reliance from CMOs and external suppliers for us to continue manufacturing and supplying our products. Aurobindo is uniquely positioned to manage supply chain risk by controlling all major aspects of the pharmaceutical supply chain. One thing that we would have liked to see is a greater appreciation for the generic industry at large, the critical work we do in collectively producing nearly 90% of the nation’s drug supply, saving, sustaining and improving lives of tens of millions of Americans, and more often than not, just pennies per pill. The generic industry should be heralded for what we do, and looked to as a clear and critical part of the solution for our nation’s healthcare system.

In the past year, it shows how important it is to have good communication, collaboration and planning with partners during any market disruptive events such as this ongoing cough/cold season. This ensures that everyone can work together, overcome obstacles and come out stronger. In addition, it is critical for all market participants to be held to the best-in-class standards of compliance and quality. By doing so, Aurobindo can grow in a sustainable manner and successfully deliver billions of doses of medicine to our customers and patients.

Dr. Reddy’s logo

North America

Marc Kikuchi
CEO, Dr. Reddy’s

There are quite a few. Keeping an ample supply of safety stock of finished goods and API is important as we continue to de-risk our supply chain. Also qualifying and retaining multiple sources for these materials from various parts of the world will help ensure continued supply.

Beyond these normal challenges based on expectations of commitment of supply and competitive pricing, things like transparency and strategic partnerships have emerged as critical factors.

Dr. Reddy’s strives to offer products that truly meet our patients’ needs. With chain stores servicing a large number of patients, it only makes sense to engage with these customers on what they anticipate will be the most beneficial to their patients. In addition, our customers are an important source of information for determining which products the market is short on, and where they see there’s demand that hasn’t been met yet. I think these conversations open opportunities on both sides. They may tell us where there’s a need in a specific therapeutic area, and we would take that feedback and try to work on it.

In other words, we believe the industry is shifting from a more transactional nature in the relationship to a more strategic one, where it’s not just about pricing; it’s about two-way communications and serving unmet patient needs.

DSN: How do you plan to help customers and patients in 2024?

Boyer: Where profitable, Amneal plans to continue delivering high-demand and high-impact products, like lisdexamfetamine dimesylate, calcium gluconate injection and naloxone nasal spray, to the market, offering customers consistent supply from the quality-focused and reliable partner we are.

Dillaway: Ascend takes some extra steps in assisting patients directly. We receive a high number of calls from patients who are specifically looking for the Ascend product. Many say their pharmacy made a change and now provides them a different manufacturer whose product may cause an unwanted side effect or in their estimation is less effective. For these customers, Ascend has partnered with PursueCare, a mail order pharmacy in W.Va., that has agreed to carry all Ascend products and take these patients as referrals in order to fill their requests for the Ascend brand. Patients are put in touch with PursueCare who can quickly transfer their prescription and deliver the desired product to them.

Ascend’s chief medical officer is an actual practicing primary care physician who is available to help with patient questions.

McMahon: In fiscal year 2023, Aurobindo led the market in ANDA approvals and filed 49 Abbreviated New Drug Applications and received final approval for 59 ANDAs. In addition, the company successfully launched and relaunched 24 products. Aurobindo Pharma looks forward to launching many more products in the coming months, as the company continues to expand its portfolio with nearly 200 pending approvals. This brings us to over 700 FDA-approved Abbreviated New Drug Applications to date. Aurobindo remains focused on strengthening our existing businesses and developing a differentiated and specialty-
driven product portfolio.

In addition to our robust organic pipeline, the organization recently acquired another manufacturing facility. Aurobindo continues to invest in infrastructure in terms of plant and capacity expansions and building new facilities, all of which will fuel our growth. We are pleased to announce our new Luoxin facility, located in China, where we’ll be producing the blow-fill-seal inhalation products, the first of which will be levalbuterol, followed by albuterol, ipratropium and others, beginning early 2024. 

To keep up with demand and continue to set itself apart, it is critical for Aurobindo to have highly competitive costs and product availability while holding to the best-in-class standards of compliance and quality. By doing so, the company is continuing to grow in a sustainable manner and successfully delivering billions of doses of medicine every month to its customers and patients. We are thrilled to announce we are offering copay cards to patients for four of our specialty products: vigabatrin tablets, ambrisentan tablets, pyrimethamine tablets and lenalidomide capsules.

Kikuchi: The best way to help patients and customers is to better understand their needs. Communication is a key. Dr. Reddy’s communicates and connects at all levels, from top executives to multi-level executives below. We believe it’s essential to make connections at all levels to provide the best service and get the most comprehensive feedback from our customers. We’re able to get the best input from connecting with various level executives to understand where there’s a real need. We have several tiers of staff that interact with customers as well as both OTC and specialty sales teams, all of whom interact daily as well as in more formalized weekly and monthly meetings. There’s constant communication, based on an incredible dedication to meeting patients’ unmet needs.

Then we must act on those unmet needs. This means maintaining a strong pipeline to facilitate the launch of new products. 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. 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 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.

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