The Hindu Business Line : Does `drug' master files number tell a tale?

IT is an open secret in the pharmaceutical industry that India tops in terms of the number of United States Food and Drug Administration (USFDA)-approved manufacturing facilities outside the US.

Top that with the fact that Indian drug companies filed the most number of drug master files (DMFs) in the US market, for the three months ended September 2004.

But do these DMF numbers mean nothing more than the paper they are submitted on? Or do they together with the manufacturing advantage carry the benefits of a "package deal" for the US market, the world's largest market for generic or chemically equivalent drugs?

"If clubbed with the manufacturing advantage, Indian companies may spell a good deal. But one should not go by just the numbers, as a DMF in isolation does not mean much - it is merely a submission of data to the USFDA that is not mandated by law. It has to be followed up with a filing for an Abbreviated New Drug Application, for instance where the data goes in for actual review by the USFDA. And only on getting an approval at this stage, can companies manufacture or market their drugs in the US," an analyst tracking the sector told Business Line.

At 36 filings for the September quarter, India accounts for nearly 38 per cent of the total number of DMFs filed in the period, according to industry data.

Aurobindo, Matrix, Cipla and Sun are some of the leading DMF filers during this period.

Given that India was ahead of other competing countries, the numbers carry a tale of the products in the pipeline for the future, the analyst said.

"But that too is riddled with several ifs and buts in terms of patent challenges and competition, so one should not rejoice on just topping the numbers," he cautions.

Competition within Indian companies is another lead factor for concern. "While Indian companies continue to build a robust pipeline with respect to the US market, there is concern on the competitive pressure (leading to commoditisation of generics), especially given the number of companies jumping in," he observes. The way ahead, analysts point out, is a cost-competitive business model and a differentiated strategy.