India Ratings and Research (Ind-Ra) opines that Indian pharma companies will benefit from an improving demand from the US market, as they have garnered 45% of all new ANDA (abbreviated new drug application) approvals over the past nine months.

While Ind-Ra expects the regulatory environment to remain stringent, well-equipped companies will be able to take the advantage of a better pricing outlook emanating from supply shortages and recalls.

Indian companies have received a higher share of new ANDA approvals since April 2020, led by significant manufacturing facility clearances, GDUFA II (Generic Drug User Fee Amendments), and a strong filing momentum, aided by historical investments in R&D.

Ind-Ra has seen an increasing drug demand since the start of pandemic, led by supply chain issues, channel filling and demand for COVID-19 led preventive products. In the past too, there was drug shortages in the US because of the exit of the large generic players from unviable products. Overall, drugs shortages in the US are leading to moderate-to-stable pricing pressures.

Ind-Ra believes USFDA inspection and related scrutiny is a part and parcel of the industry. Despite having the second-largest number USFDA approved plants (active pharmaceuticals ingredients and formulations), India has faced average of just 9% of the total USFDA inspections globally over the past 12 years.

In terms of USFDA inspection outcome, globally average of just 7% of total inspections were concluded with OAI (official action indicated; adverse outcome of an inspection) status over the past 12 years while rest are NAI (no action indicated) and VAI (voluntary action indicated) which means no problem at the facility. Out of the total inspections, Indian pharma companies have received average 11% OAI status. Indian companies have received three of the seven warning letters issued since August 2020.