Issues to remain as restricting bioequivalence test scrapped

Issues of preferential sales approval on multiple generics to remain

Despite pricing benefit for generic with individual test data, high demand for first generic won’t die out

The issues regarding highly saturated first generic market would likely to remain as the Regulatory Reform Committee has axed the Korea Ministry of Food and Drug Safety’s (MFDS) plan to restrict joint and cosigned bioequivalence test.

 

Even if the government grants favorable pricing on generics with individual test data from July, the industry experts expect that many of pharmaceutical companies would still choose to run joint bioequivalence tests to not miss out on their market release timing.

 

Accordingly, pharmaceutical companies can now save much on their R&D and production costs like on pharmaceutical research and bioequivalence test.

 

But the issues of pharmacy and primary consumer’s difficulty in product dispensing and illegal rebate provision within the heated competition would remain the same in the saturated generic market.

 

Moreover, the issue of multiple generic receiving preferential sales approvals, initially expected to be eliminated with the joint bioequivalence test restriction, would likely to continue causing inefficiency in the market.

 

Nothing to cripple first generic market saturation On April 24, the Regulatory Reform Committee has disclosed its meeting minutes deliberating the MFDS’ revision on the Regulation on Pharmaceuticals Approval, Notification and Review that restricts joint and cosigned bioequivalence test, and recommended to abolish the plan.

 

Sources report MFDS is reviewing on accepting the recommendation and issuing the regulation revision notice without the restriction on bioequivalence test.

 

The Regulatory Reform Committee has recommended the ministry to abolish its plan to limit the number of generics with joint or cosigned bioequivalence test data as one (main tester) plus three (number of cosigned testers), which the restriction was supposed to be reevaluated after five years.

 

The restriction on the joint bioequivalence test was temporarily imposed (one-plus-one) due to the 2006 joint test manipulation incident, but it was lifted in 2010 by the Regulatory Reform Committee’s demand.

 

Currently, an unlimited number of cosigned testers can share the bioequivalence test results and use CMOs to manufacture generic product.

 

Since the discovery of impurity in valsartan products, MFDS pointed out the quality control as a reason for the restriction on the joint bioequivalence test, but it actually targeted prevention of further saturation in the generic market.

 

Moreover, the Ministry of Health and Welfare (MOHW) has also started restraining the generics market by pricing the products depending on the submission of individual bioequivalence test results and the use of DMF registered substances.

 

The differentiated drug pricing by MOHW would be enforced from coming July, starting from newly approved items.

 

For instance, a product using pharmaceutical ingredients registered on DMF but submitted data from a cosigned bioequivalence test would be priced at 45.52 percent of the original’s price.

 

Whereas the ones with individual test data are priced at 53.55 percent of the original’s price as stipulated by the existing drug pricing formula.

 

But many of the pharmaceutical industry claim the differentiated pricing would inevitably change the cosigned manufactured generic policy, regardless of the joint bioequivalence test policy.

 

As a result, the industry also projects the effect of abolishing the joint bioequivalence test policy would be insignificant.

 

As for the effort to prevent saturation of generics market, however, the number of generic products in the first generic market would unlikely to be affected, because the joint bioequivalence test policy is scrapped.

 

There are several reasons as to why the industry experts expect the demand on cosigned manufactured generic would not be crippled any time soon.

 

Many of the pharmaceutical companies without individual bioequivalence test result would highly likely to resort to CMOs to not miss out on timely market release.

 

And the CMOs without strong sales power would call for clients to generate as much profit as possible.

 

On Apr.

 

17, 16 of benign prostatic hyperplasia (BPH) treating generics, tamsulosin 0.4 mg, were approved by the Korean government.

 

All of them are manufactured by a same CMO, Dongkoo Bio&Phama.

 

And other various items manufactured by CMOs like Kolmar Korea, Dasan Pharmaceutical and others are seeking for approvals.

 

If the joint bioequivalence test was limited to one-plus-three, Dongkoo Bio&Pharma would only get to manufacture four items, which would then reduce the number by 12.

 

Despite the policy that prices CMO generics 8 percent less, the industry experts see that the small and medium companies’ demand on CMO generics in the first generic market would remain the same, as they can still save on R&D cost and make profit from early release in the market.

 

Questionable benefit of preferential sales approval on multiple items As long as the preferential sales approval grants exclusivity in the generic market for nine months, the generic market would never seize to get even more saturated.

 

A number of pharmaceutical companies competing against each other for the patent-challenged first generic market would turn to the CMOs once they lose out in the game, and share its bioequivalence test data to join the generic market early.

 

And generic makers with an option to opt out on investing on drug development would eventually sign the CMO deals.

 

CMOs that have developed generics for client deals would have nothing to fear with the abolishment of the joint bioequivalence test restriction.

 

The pharmaceutical industry has been constantly reprimanding the existing preferential sales approval system distributing the benefit to multiple companies.

 

Some expected the restriction on the joint bioequivalence test would also eliminate the preferential sales approval issues, but now it seems it would remain the same as the plan has been shut off.

 

Due to the government’s action, now the industry may demand for the change more than before.