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Asian contract manufacturers key to curbing EU generics costs

By Kirsty Barnes, 29-May-2007

Related topics: Regulatory & Safety

Using low cost contract manufacturing destinations are the key to helping generics firms in Europe keep their drugs cost-effective, says a Frost & Sullivan report.

Faced with the mounting cost of branded pharmaceuticals and a rapidly ageing population, European governments are under immense pressure to implement corrective measures and are skewing policies towards generic drug substitution as part of this.

 

 

 

However, generics manufacturers are currently confronted with hurdles such as access to European markets due to disparate country-specific policies regarding generics, as well as delays in marketing authorisation applications due to the lack of provisions such as the Roche/Bolar provision, which allows for research to be carried out before the loss of patent exclusivity.

 

 

 

Factors such as these are having a significant impact on generics firms in Europe and many are struggling to keep their costs to a minimum in this area of the pharmaceutical industry that already operates with narrow profit margins.

 

 

 

"To succeed in this highly competitive environment and accelerate their time-to-market, participants should leverage the potential of low-cost contract manufacturing markets such as India and China," said the report, titled: Pricing and Reimbursement Issues for Generics and Biosimilar Markets in Europe.

 

 

 

"The pharmaceutical development and manufacturing model is based on producing a high-quality and high-cost proprietary molecule, but this model is not well suited to the production of generic drugs," Sumanth Kambhammettu, Research Analyst at Frost & Sullivan told Out-Sourcing-Pharma.com.

 

 

 

"Low-cost contract manufacturers in developing countries such as India and China will play an increasing role in the global generics market. They don't have a significant share at present, but they are continuing to mature and develop the necessary infrastructure and within 10-15 years will be doing a very significant trade."

 

 

Meanwhile, not all aspects of generic drug development are suitable to be handed over to a third party in a developing country, said Kambhammettu.

 

 

 

"Whether this is suitable depends on the product being made as well as the expertise and volume required," he said.

 

 

 

Fine chemical, active pharmaceutical ingredient (API) and excipient production, along with formulation and finished dosage forms are all aspects that can be comfortably outsourced to these destinations. Newer and more complicated functions such as those involving the biomanufacturing of biosimilars are not yet at this stage.

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