Generic companies seek help from service providers to avert revenue crises

By Zachary Brennan contact

- Last updated on GMT

Generic companies are looking for new revenue streams
Generic companies are looking for new revenue streams

Related tags: Pharmaceutical industry

The panic behind the patent cliff for big pharma is now hitting generic companies, which are increasingly turning to service providers and consultants to help find solutions for holes in their pipelines. 

But generic companies, which usually lack the scientific knowhow and manufacturing capacity of their larger, brand-name counterparts, are looking for loopholes and new ways to fill the holes they’re expecting in their balance sheets between 2016 and 2019.

One way the generic companies are looking to fill those holes is through the 505(b)(2) application process, which allows companies the ability to file NDAs (new drug applications) with publically available information as a substitute for conducting some of their own clinical trials and to speed up the approval process.

Ken Phelps, president and CEO of Camargo, a full service CRO that specializes in the 505(b)(2) process, told Outsourcing-Pharma about this expected cliff and said C-level executives from generics companies are “squirming right now​” as they’re expecting this “pending cliff​” to cause a “precipitous drop​” in their businesses.

The 505(b)(2) route is particularly attractive because companies can shave off almost half of their development timeline and the cost of these projects is about 1/10th​ the cost of a standard drug development program, Phelps said.

And unlike generic drugs where exclusivity can be held for only 180 days, the 505(b)(2) applicant may qualify for three, five or even seven years of market exclusivity, depending on the extent of the change to the previously approved drug and the type of clinical data included in the NDA.

Return on Investment

But I want to stress that generic companies don’t know which projects will have a ROI [return on investment]​,” Phelps said, noting that some companies undertake 505(b)(2) projects with “no idea if they’ll be commercially attractive​.”

We have way too many prospective clients that can’t do a marketing survey​,” Phelps said, noting that just because a company can make a change to a drug and get an NDA approved by the FDA does not mean that the company should carry out the project or that it will be commercially viable.

As Camargo sees more companies looking to make profits off of new technology or re-formulated drugs, Phelps said the top questions to consider should be:

  • Will the new drug be useful and approvable by the FDA?
  • Can it compete with what else is on the market?
  • What will the payback be for the investment?

As far which therapeutic areas generics companies are targeting, Phelps said “the old favorites are still the new favorites​,” mentioning cardiovascular, oncology, diabetes and endocrine drugs as all top areas for investments. But he added that generic companies seem hesitant to go after biosimilars because of the uncertainty under the approval pathway and the reimbursement questions.

There are “a lot of opportunities for improving drug delivery and covering​” the patient populations that current marketed drugs might not be indicated for, such as pediatric populations, Phelps said.

Related news

Related products

show more

How a clinical metadata repository helps with data

How a clinical metadata repository helps with data

Formedix | 22-Mar-2021 | Technical / White Paper

This article covers the various ways a clinical metadata repository helps with data quality, and in turn, with data quality in the clinical trials process....

Introduction to eLAS®

Introduction to eLAS®

Clinical Ink | 08-Mar-2021 | Product Brochure

Clinical Ink has developed a unique offering — the electronic Lupus Assessment Suite (eLAS®) to address fundamental challenges impacting systemic lupus...

Related suppliers

Follow us


View more