Reactions to the September Approval Actions from Readers

In my October 5, 2021 post (here), I discussed what appeared to be a significant dip in ANDA approval and tentative approval actions, as well as a decrease in the number of ANDA submissions. I mentioned that I did not have further insight as to the decline in these metrics but did mention that maybe I will hear something at the GRx-Biosims conference coming up in early November.  That did not prevent some of you from providing your thoughts on the slowdown and, in this post, I am passing on some of potential “whys” that readers have put forth.

Views from the trenches are provided below:

• The current environment in the generic space is extreme over-supply coupled with buyer consolidation. We have been seeing (and have been offered many approved, un-marketed products) for next to nothing. No upfronts, only profit share coupled with favorable payments terms from manufacturers. Even with these favorable terms, most are not viable.
• There are simply too many approved commodity ANDAs out there. What makes the situation worse is the agreements one must sign with the big three. There are penalties for everything, not just failure to supply, but penalties for raising prices, lowering prices, raising wholesale acquisition costs (WAC), lowering WACs etc.
• The problem is that, once a participant lowers prices to capture share, the entire market for that product is dragged into the abyss. If the primary award winner has a disruption to supply on a moderate to high volume product, the secondary may no longer have the capacity to fill the gap. There are multiple reasons for this.
• The market from ANDAs has disappeared. Many small bankers will not say it, but they are no longer interested in selling baskets of ANDAs. Companies with assets are running their own processes with few takers.
• The high cost of filing may be the straw that broke the camel’s back. It will soon come back to haunt FDA!
• The consolidation issue may be a driver. Take two major generic players, each submitting 30+ ANDAs a year. If an M&A occurs, that will knock out 30 ANDA submissions.  If there are two to three major consolidations, that could mean a drop of between 60-90 ANDAs a year from these entities.
• Complex generics appears to be where the money is to be made. Development and meeting unknown FDA expectations slow down the process. Expending significant resources for a complex product will likely reduce expenditures on non-complex generics.
• The constant cycling of the ANDA review with new questions cropping up even after the second or third cycle (which have never been asked before) lengthen the approval times, and, because of rapid market changes, may make the product either no longer financially viable due to other multiple entrants or the inability to get into the big three, when the price is at a point where a reasonable profit can be made. First cycle reviews can help the problem, but I just don’t see an improvement over time.

These represent the types of comments received based on this one post.  There are likely other views and we would love to see them and share them around to keep the conversation fresh. You may send your thoughts directly to me at r.pollock@staging.lachmanconsultants.flywheelsites.com.