Challenges in Challenges in Generic Drug Development Generic Drug Development

for Regulated Markets for Regulated Markets --An Indian PerspectiveAn Indian Perspective

Rajeev P PatilRajeev P PatilLupin LimitedLupin Limited

Feb. 21, 2008Feb. 21, 2008

We will be discussingWe will be discussing………………

Real Challenge: To be in the market on Real Challenge: To be in the market on ‘‘Day OneDay One’’Emerging Generic Market Dynamics in US & EUEmerging Generic Market Dynamics in US & EUIdentification of Niche ProductsIdentification of Niche ProductsSimultaneous Development for Different Simultaneous Development for Different GeographiesGeographiesRight Development EffortsRight Development EffortsAPI: Heart of Generics DevelopmentAPI: Heart of Generics DevelopmentKey Challenge: Patents & Litigations Key Challenge: Patents & Litigations Prepare For New Challenges & HurdlesPrepare For New Challenges & Hurdles

“It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change”

Charles Darwin

………………&&…………. Indian Pharmaceutical . Indian Pharmaceutical Community has got fantastic flexibility to Community has got fantastic flexibility to accept any challenge & adapt to accept any challenge & adapt to ChangeChange………………………………. .

Real Challenge: To be in the market Real Challenge: To be in the market ‘‘on Day Oneon Day One’’

Ultimate Test for success of Generic Drug: Product Launch on theUltimate Test for success of Generic Drug: Product Launch on theday of Patent / Exclusivity Expiry day of Patent / Exclusivity Expiry ----> Follow > Follow MahaMaha--MantraMantra

………….for Product Identification, Development, ANDA / MAA / DMF .for Product Identification, Development, ANDA / MAA / DMF Submissions, all subsequent Responses to Queries, Amendments, Submissions, all subsequent Responses to Queries, Amendments, Variations, Inspections, Product Launch, etc. Variations, Inspections, Product Launch, etc. …………....

Do it Right First TimeDo it Right First Time

EmergingEmerging Generic Market Dynamics in US & EUGeneric Market Dynamics in US & EU

Demand For Low Cost Substitution Demand For Low Cost Substitution Increased Generic Increased Generic UseUse ##US: Medicare Drug Reimbursement US: Medicare Drug Reimbursement EU: Govt. Price ControlsEU: Govt. Price Controls

Growth of Generic Sector driven by Growth of Generic Sector driven by PatentPatent Expiry Expiry ##Successful Patent Challenges by Generic CompaniesSuccessful Patent Challenges by Generic CompaniesCompetitive Pricing Competitive Pricing Slowing of Regulators due to strain on resources: Slowing of Regulators due to strain on resources: Longer Approval Time Longer Approval Time

EmergingEmerging Generic Market Dynamics in US & EUGeneric Market Dynamics in US & EU

India Factor India Factor

•• Leaders in Capital Investment in Generics: Highest Leaders in Capital Investment in Generics: Highest no. of no. of ““Approved PlantsApproved Plants”” by US FDA outside USby US FDA outside US

•• Cost Advantage in R & D & ManufacturingCost Advantage in R & D & Manufacturing•• Minimum Development Time Minimum Development Time •• Success of Indian Companies in US & EUSuccess of Indian Companies in US & EU•• Leadership in API Development & Manufacturing Leadership in API Development & Manufacturing ##•• Experience in Reverse Engineering DrugsExperience in Reverse Engineering Drugs•• Growth Through Partnering, Acquisitions, etc.Growth Through Partnering, Acquisitions, etc.

Identification of Niche ProductsIdentification of Niche ProductsNormal IR Products face severe competition may be by Normal IR Products face severe competition may be by 10 to 15 Generics 10 to 15 Generics Price ErosionPrice Erosion ##

Need to be Innovative in Product Selection Need to be Innovative in Product Selection --Value Added GenericsValue Added GenericsControlled release Products Controlled release Products Nasal Products Nasal Products

Topicals Work with FDA to Topicals Work with FDA to develop BE Protocols develop BE Protocols --(In(In--Vitro + Clinical End Point?)Vitro + Clinical End Point?)

Identification of Niche ProductsIdentification of Niche Products505 b(2) Products505 b(2) Products……..if You Can. ..if You Can.

oo –– If limited Clinical Trial or just BE study is enough.If limited Clinical Trial or just BE study is enough.

““505 b(2)505 b(2)”” Products have some differences from Products have some differences from previously approved products previously approved products ---- New Strengths, New Dosage Regimen / IndicationNew Strengths, New Dosage Regimen / Indication-- New Salts, Esters, Complexes, etc.New Salts, Esters, Complexes, etc.-- BioBio--similar / Biosimilar / Bio--generics ..???generics ..???

Will it be the next Biggest Opportunity For Generic

Companies ? India ?

Identification of Niche ProductsIdentification of Niche Products

Go for Go for ““Small ProductsSmall Products”” also also ––competition will be competition will be low low –– More Returns?More Returns?Go for discontinued a product through Go for discontinued a product through Suitability Petition Route Suitability Petition Route -- if there is no Safety if there is no Safety issue issue GoGo forfor additional / different dosage form than additional / different dosage form than innovator e.g. Instead of Powder for Suspension innovator e.g. Instead of Powder for Suspension develop Chewable Tablet develop Chewable Tablet

Suitability Petitions Suitability Petitions with FDAwith FDA

Simultaneous Development for Different Simultaneous Development for Different GeographiesGeographies

Identify Target Countries Identify Target Countries –– US, EU, Australia, Canada, etc. US, EU, Australia, Canada, etc. before initiation of Developmentbefore initiation of Development

Know Know –– Patent /Exclusivity Expiry, Patent Extensions / SPCs Patent /Exclusivity Expiry, Patent Extensions / SPCs

Understand Differences between Innovators / Reference Understand Differences between Innovators / Reference Products & Decide Strategy of Development:Products & Decide Strategy of Development:Different Strengths in different regions?Different Strengths in different regions?ScoreScore--line? Overages?line? Overages?Differences in Packaging?Differences in Packaging?BE or PE (Pharmaceutical Equivalence) Route? e.g. Australia, BE or PE (Pharmaceutical Equivalence) Route? e.g. Australia, South AfricaSouth AfricaReference Product for BE in EU?Reference Product for BE in EU?

Simultaneous Development for Different Simultaneous Development for Different GeographiesGeographies

Take into account Different Regulatory Take into account Different Regulatory Requirements Requirements ––No. of Exhibit / Stability BatchesNo. of Exhibit / Stability BatchesBE Requirements BE Requirements -- e.g. Sustained Release e.g. Sustained Release Product Product

USUS: : EU / AustraliaEU / Australia: :

Fasted and/or Fed Fasted and/or Fed FastedFasted+ Fed+ Fed+ Steady State + Steady State

Delays in Product Approval are due toDelays in Product Approval are due to::

Inadequate product development results into slow Inadequate product development results into slow responses to Regulatory Queries responses to Regulatory Queries Multiple Cycles of reviewMultiple Cycles of review93 % ANDAs not approved in 1st Cycle 93 % ANDAs not approved in 1st Cycle

59 % ANDAs not approved in 2nd Cycle59 % ANDAs not approved in 2nd Cycle

Problems in Dissolution Profiles (suspension, differing Problems in Dissolution Profiles (suspension, differing strengthsstrengths…….).)Inactive ingredient outside of previously approved levelsInactive ingredient outside of previously approved levels

Right Development EffortsRight Development Efforts

Right Development EffortsRight Development EffortsParenterals / Ophthalmics Parenterals / Ophthalmics –– Quantitatively (Q1) & Qualitatively (Q2) not Quantitatively (Q1) & Qualitatively (Q2) not Identical to InnovatorIdentical to Innovator

Problems in BE Studies Problems in BE Studies ––Failure to follow ProtocolsFailure to follow ProtocolsInadequate Analytical Validations Inadequate Analytical Validations Failure to assure data accuracy, proper dosingFailure to assure data accuracy, proper dosing

Deficiencies in API DMF Deficiencies in API DMF –– Not enough CoNot enough Co--operation & Transparency of operation & Transparency of API Supplier API Supplier

Develop Products keeping in view all the current Develop Products keeping in view all the current Guidelines: Avoid Shortcuts Guidelines: Avoid Shortcuts

They can be Very Expensive They can be Very Expensive

Inadequate Controls on

CRO - Audits, Monitoring

API API –– Heart Of Generics DevelopmentHeart Of Generics Development

During Product Identification Decide Strategy on During Product Identification Decide Strategy on API API –– Own? Outsourced? Cost Effectiveness ?Own? Outsourced? Cost Effectiveness ?Does timelines of Development match?Does timelines of Development match?Patents Issues? Patents Issues?

Polymorphism/Solvates Polymorphism/Solvates Particle SizeParticle SizeIsomer Levels Evaluate Isomer Levels Evaluate ::

Patents Patents -- Filed &Filed &GrantedGranted

API API –– Heart Of Generics DevelopmentHeart Of Generics Development

Keep track on likely pharmacopoeial Changes Keep track on likely pharmacopoeial Changes --Impurities, Moisture, etc. Can Delay ApprovalImpurities, Moisture, etc. Can Delay ApprovalCoCo--operation from API / Key Starting Material Supplier operation from API / Key Starting Material Supplier --

Detailed Agreement Detailed Agreement ---- Supply + TechnicalSupply + Technical

Strict Change Control Strict Change Control –– Involvement of FormulatorInvolvement of Formulator

Make API Supplier partner in DevelopmentMake API Supplier partner in Development

Strict Control on Key Intermediates, Key Starting Materials Strict Control on Key Intermediates, Key Starting Materials Regulators are increasingly asking more about Carryover Regulators are increasingly asking more about Carryover

of Impurities & Solvents to API, etc.of Impurities & Solvents to API, etc.

API API –– Heart of Generics DevelopmentHeart of Generics Development

Characterization / Qualification of Characterization / Qualification of Impurities above allowed Threshold (as Impurities above allowed Threshold (as per ICH)per ICH)Control of Genotoxic Impurities e.g. Alkyl Control of Genotoxic Impurities e.g. Alkyl Mesylates ,Sulfonates, etc.Mesylates ,Sulfonates, etc.Qualification /Justification for levels of Qualification /Justification for levels of Class IV & Solvents not listed in ICHClass IV & Solvents not listed in ICHStudy of Recycling, Recoveries during Study of Recycling, Recoveries during development: Quite Often not taken care development: Quite Often not taken care during developmentduring development

Key Challenge Key Challenge -- Patents & LitigationsPatents & Litigations

Watch new Patents filed or Extensions / Watch new Patents filed or Extensions / Exclusivities granted & decide Strategy Exclusivities granted & decide Strategy ––Any Changes in Process (API / Formulation) to Any Changes in Process (API / Formulation) to be done?be done?Any indications to be deleted?Any indications to be deleted?Keep track of outcome of related litigations Keep track of outcome of related litigations Paragraph IV Applicant if sued Paragraph IV Applicant if sued --Decide, Is it worthwhile to Fight the case? Decide, Is it worthwhile to Fight the case? or, or, ““SettleSettle”” the case if you realize later about the case if you realize later about your own weakness your own weakness –– financial or otherwisefinancial or otherwise

Weigh Cost -

Benefits

Prepare For New Challenges & HurdlesPrepare For New Challenges & Hurdles

CitizenCitizen’’s Petitionss PetitionsRequest by individuals/innovator companies to Request by individuals/innovator companies to FDA to take an action articulated in the petition FDA to take an action articulated in the petition (BE requirements, labeling changes, Safety (BE requirements, labeling changes, Safety issues, etc.)issues, etc.)Often submitted just prior to Approval of Generic Often submitted just prior to Approval of Generic DrugsDrugsDelay final approval of pending ANDAsDelay final approval of pending ANDAsMust be addressed by FDA prior to issuance of Must be addressed by FDA prior to issuance of Approval LetterApproval Letter

Prepare For New Challenges & HurdlesPrepare For New Challenges & Hurdles

Authorized GenericsAuthorized Generics::Marketed by or on behalf of a Innovator drug companyMarketed by or on behalf of a Innovator drug companySuccessful Para IV ANDA applicants face competition from Successful Para IV ANDA applicants face competition from Authorized Generics during 180Authorized Generics during 180--day generic exclusivity periodday generic exclusivity period

In 2003, Apotex got 180In 2003, Apotex got 180--day exclusivity for Paroxetine (Paxil day exclusivity for Paroxetine (Paxil of GSK ) of GSK ) –– expected to sell $ 575 Mn during 180 days period expected to sell $ 575 Mn during 180 days period but sold ~200 Mn as GSK introduced the authorized generics but sold ~200 Mn as GSK introduced the authorized generics

May discourage generic firms to file Para IV Challenges if May discourage generic firms to file Para IV Challenges if litigation expenses can not be recouped through 180litigation expenses can not be recouped through 180--day day exclusivity period exclusivity period + + + + + + + + Many More ChallengesMany More Challenges –– ????????????????????

We have to Prepare For Many More Challenges & We have to Prepare For Many More Challenges & HurdlesHurdles………… & still remain ahead in the race& still remain ahead in the race……………………..

…………………………....All The Best.All The Best.

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Different Global Generic Market Sizes $ bnDifferent Global Generic Market Sizes $ bn

RegionRegion20062006

As per IMSAs per IMS20082008

USAUSA 2323 6868

West EuropeWest Europe 1414 1919

East EuropeEast Europe 1313 NANA

JapanJapan 33 33

Total GlobalTotal Global 100100 100100

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011

Value of Drugs going off patent 2006 - 11

Source : IMS

$ Bn

Generics – API’s% Share of USA DMF filings

India China2004 27% 9%2005 37% 10%2006 44% 14%Q1’07 48% 17%

Source: US FDA / J P Morgan, 2 may 2007

Source: US FDA, Credit Suisse

More Generic Competition Lowers Drug Prices

33% 26% 23% 21% 20% 26% 22%39%

94%

52% 44%

0%

50%

100%

1 2 3 4 5 6 7 8 9 10 11

Number of generic manufacturers(Analysis of 1999-2004 retail sales data from IMS Health)

Num

ber

Avg. relative price per dose