For drug companies outside of the U.S. the Food and Drug Administration (FDA) can feel like a mythological three-headed dragon. Considering that the Office of Generic Drugs published 98 drug specific guidances just last year, it makes sense that there is some hesitation, and even confusion, around how to approach U.S. market entry.

However, there is significant growth potential for generic drugs in the U.S., where even a small market penetration can result in significant profit gain. So, how can drug companies capitalize on the U.S. market potential with confidence?

Pharmatech’s roadmap to U.S. market entry provides an end-to-end, integrated strategy that informs intelligent tradeoffs and a more cost effective, efficient path to FDA approval and U.S. commercialization.

What to Consider Before Pursuing U.S. Market Entry

Market Demand for Generics

The demand for generic drugs in the U.S. is high, with 6.3 billion prescriptions written annually and more than 300 drug shortages each year. This is good news for drug companies pursuing U.S. market entry, because there is an acute need for low-cost, high-quality drug offerings.

However, drug companies still should consider if your product is the first generic of its kind. If not, how will you market your generic product against competitors? While approvability of a product is of utmost importance, considering your business strategy and marketability is an essential precursor activity.

U.S. Market and Regulatory Requirements

Before approaching U.S. market entry, it’s important to understand how the commercial drug market in the U.S. may differ from other markets. For example, the Drug Quality and Security Act (DQSA) is a federal law enacted in 2013 that encompasses the:

• Compounding Quality Act – enforces good manufacturing practices (GMPs) for outsourcing facilities to ensure the safety and quality of compounded drugs. The act also outlines requirements for labeling, reporting adverse events, and inspections of these facilities by the Food and Drug Administration (FDA).
• Drug Supply Chain Security Act – requires manufacturers, repackagers, wholesale distributors, and dispensers to implement systems for tracing products throughout the supply chain to improve visibility and accountability for drug companies.

In the U.S. market, a compliance mindset isn’t good enough. The FDA is looking for companies with a quality-driven culture focused on proactive measures to improve patient outcomes and become a market leader. Oncology products comprise 40% of all new products in the U.S. market. This indicates significant growth potential, but developers and manufacturers will have to demonstrate and defend their quality culture in order to excel.

Bioequivalence and Biosimilarity

In an Abbreviated New Drug Application (ANDA), Generic drugs must demonstrate bioequivalence to the FDA-approved reference product through bioavailability and bioequivalence studies. These studies assess the drug’s absorption, distribution, metabolism, and excretion (ADME) profiles in comparison to the reference product. This is often the most costly component of any U.S. filing.

Unlike small molecule generics, biosimilars are complex biological products that are similar but not identical to their reference biologics. In this case, you must demonstrate similarity to the reference product. The FDA assesses data from clinical studies to determine if the biosimilar has no clinically meaningful differences in terms of safety and efficacy.

Go-to-Market Timeline

How far in advance should you start preparing for U.S. market entry? Plan for 3-6 months for your assessment, 12-18 months to compile your filing (this can take longer for biosimilars), and 12-18 months for commercial ramp up. In total, that’s approximately 36 months.

Common Barriers to the U.S. Market for Generic Drug Companies

While the U.S. market is ripe for generic drug developers, there are several common barriers for companies pursuing U.S. market entry.

Finding the right distribution partners

Distribution planning is particularly complex in the U.S. because every state has its own licensing requirements. There are two licensing routes: state by state or through a single large entity, such as a third-party logistics provider. Choosing the right distribution partner can impact your pricing strategy and help forge relationships with manufacturers and pharmacies.

Proving data integrity

As more drug manufacturers transition to paperless quality management systems, data integrity is highly scrutinized in the FDA approval process. Outside of the U.S. it’s often required to prove the legitimacy of your lab and that you have not falsified any data. The FDA takes data integrity a step further, requiring that manufacturers demonstrate that they have in place the necessary infrastructure to support the data quality and data integrity aspects of any GMP data.

A stringent regulatory authority (SRA) is a national drug regulation authority which the World Health Organization (WHO) considers applying stringent standards for quality, safety, and efficacy. However, different SRAs can have completely different requirements. For example, if you are importing an aseptically processed injectable drug to the U.S. market that has already been commercialized in Europe you will have to account for the differences in facility design the two SRA’s utilize as the basis for contamination control. Understanding the differences in each health authorities’ approach to demonstrating safety and efficacy is an essential component to achieving a positive FDA review and approval.

Pharmatech’s Roadmap to U.S. Market Entry

1.      Market Entry Assessment

Before setting out on your journey for FDA approval and U.S. commercialization, you’ll want to get a clear understanding of how your product aligns with the market landscape. This includes:

• Evaluating intelligent tradeoffs, such as choosing a simple product or one with a unique competitive landscape.
• Regulatory planning to ensure alignment with the Reference Listed Drug (RLD) and identify any gaps in compliance.
• Auditing your entire QMS to determine manufacturing readiness against 24 criteria for manufacturers outside the U.S. At Pharmatech, we recommend going deeper than a typical QMS audit, including asking your staff to explain what they do and why.

2.      Strategic Alignment

After the initial assessment, you’ll establish strategic alignment to ensure efficient and effective FDA approval and commercialization. This involves:

• Assessing the intellectual property landscape.
• Understanding the legal frameworks in the U.S. and what challenges they present.
• Developing a market entry strategy, with consideration to the advantages and disadvantages of national programs, like Build Back Better.
• Establishing high-level timelines and clearly defining roles and responsibilities within the organization.

3.      Regulatory Compliance

Before you’re ready to file with the FDA, you’ll need to compile and write your filing. For generics, this is where you build your argument to the agency that your generic is the same as the RLD. One of the most intimidating and essential pieces of regulatory compliance at this stage is engaging with the FDA. The Office of Generic Drugs approved 956 products in 2023. With such a high volume of filings, the FDA is intolerant of incompleteness or lack of clarity. It’s important to know what questions to anticipate, the rigor of data they expect, and how to conduct mock inspections from the FDA’s lens.

4.      Commercial Readiness

FDA approval is the first major hurdle to U.S. market entry, but it’s equally as important to invest in commercial readiness, which includes marketing, collateral, and planning for regulatory consequences. Start planning for commercial readiness at least 12 months prior to market entry, so you have time to establish your supply chain, distribution, licensing, and channel strategy.

Commercial readiness essentially means that you can effectively sell your product in the U.S. market. Make sure you have monitoring and reporting established early, but also prepare for last minute changes, like labeling approval. In every commercial readiness strategy, there will be tradeoffs with cost, risk, and speed. Having a strategy in place empowers you to make intelligent tradeoffs to support your primary goals.

5.      Risk Mitigation

While there is growth potential for generics in the U.S. market, it’s imperative to plan for various risks and variables. For example, in the U.S. some generics are granted 180 days of marketing exclusivity if you are the first generic for a specific RLD. Managing these risks as part of the development activity while preparing for commercial launch will allow first to market drug sponsors to fend off threats to their hard-won market share from later market entrants.

For example, when Femstat, which treats vaginal yeast infections, first came on the market, they were met with strong counter measures from their leading competitor, Monistat. They used selective data to effectively slow Femstat’s market penetration and growth. Having a clear plan for countermeasures in advance is essential to minimizing the effectiveness of these threats to your market share.

6.      Long-Term Growth

You’ve gained U.S. market entry — now what? Too many drug companies put all of their focus on FDA approval and commercialization but fail to plan for what lies beyond the horizon. It’s important to establish your future goals for your product early on. How will you increase market share in the U.S., pursue formulary adoption, and define other key strategic initiatives?

With Pharmatech, you can approach the FDA three-headed dragon with confidence. Because we are an end-to-end firm, with engineers and consultants that have decades of experience in drug development, regulation, compliance, and commercialization, we can help you make intelligent tradeoffs as you navigate U.S. market entry. Contact us today to learn more.