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Generic Drug Fees: A Fantastic Oppprtunity
7:13 AM MDT | September 1, 2011 | By GIRISH MALHOTRA
The U.S. FDA has created a fantastic opportunity for incorporating the best manufacturing technologies in the pharmaceutical hemisphere by charging fees to every generic company globally. The carrot of early approval - if that happens - will be a driver to have the best processes for active pharmaceutical ingredient (API) and formulation if the companies want to produce repeatable quality and safe drugs. Early approvals also will mean quicker profits compared to the current status. It would be a win-win.
Early approval will require that processes meet the regulatory requirements on the first pass. Quality by Design (QbD) will have to be the mantra. This can happen only when the filing company has command of the process through the best use of manufacturing technologies. It would be in a company’s interest to implement the best technologies to recover the cost of the fees. Having the best technologies will also mean that the companies that cannot meet the regulatory standards after paying fees will have to review their long-term business strategies. Only the best will survive. Long-term this could result in consolidation. Lower costs could be also be on the horizon.
Consolidation would have additional benefits of capitalizing on economies of scale, for example, better manufacturing technologies and processes will be the driver for companies to stay in business. Better quality drugs will mean that many of the TLA’s (three letter acronyms) that are prevalent in pharma will fit in the puzzle and might not be needed. QbD and Process Analytical Technology (PAT) will become a way of life rather than perceived voodoo science, as many think. Before the fact rather than after the fact will force competition.
I firmly believe adoption of fees will be the best thing for generic pharmaceutical companies. Companies who believe in the best technology will survive. Congratulations and thank you to all individuals who have been involved in driving this discussion.
Girish Malhotra, PE