Current Market

There is currently a market epidemic in the sterile injectable field in the United States. Medication shortages are rampant and hospitals and healthcare practitioners are feeling the burden. The simple answer to why America currently has so many shortages of generic sterile injectable drugs: America’s leading manufacturer of generic sterile injectable drugs hasn’t been making them (http://fortune.com/longform/pfizer-drug- problem-fortune-500).

 

The current regulatory constraints in the FDA approval process are what lead to a system that perpetuates shortages. There is a systematic disincentive to efficiency and proper function. This is due to: (i.) The dramatic disparity in margins between generic and branded products, (ii.) Both sectors dominated by the same industry players, and (iii.) Generic shortages helping drive patients into branded products.

“The FDA understands that hospitals and other health care facilities can feel blindsided by these shortages. The FDA is committed to taking new steps to address the root cause of more of these shortage situations.” -Scott Gottlieb, MD, FDA Commissioner 

There have been regulatory attempts to quash the issue at hand:

  • In 2018, the FDA committed to establishing a drug shortage task force and began developing financial incentives to discourage the underproduction of shortage prone products.

  • 61 FDA Quality Warnings were issued to major pharmaceutical companies in 2017.

  • FDA and the EU have collaborated since May 2014 to evaluate the way each agency inspects drug manufacturers, which allows for cross border approvals on a significantly abbreviated time-frame.

 

Figure 1 below illustrates the decline in the percent of injectable products in the United States over a period of 5 years. As you can see there is a consistent gap in the market and a need for sterile injectables in the US. As of 04/06/2019, there are 228 drugs on the FDA drug shortage list.

Figure 1. Sterile Injectals in Short Supply

Now is the time to take advantage of this market shortage and future market shortages. This is the opportunity Dawah Pharmaceutical Inc. is grabbing. To better understand the market opportunity we will now, through illustrated examples, paint a picture of the current market.

 

 

Figure 2. US Generic Injectables Market Forecast: Sales Value

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Current trends in the generic injectables market only show increasing trends in market value. With limited players in the field, Dawah, by even taking a small percent market share, can become highly profitable. Current major players in the market are Hospira (Pfizer), Hikma, Fresenius Kabi, Sagent, and Sandoz.

 

Figure 3. United States: Generic Injectables Market: Breakup by Key Players (2016)

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The generic sterile injectable industry is sought after by all the key players. In fact, over the last few years, there have been several buy-outs of generic sterile manufacturing facilities, as seen below in Figure 4. 

 

Figure 4. Announced M&A Transactions

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One of the market facts that breed our confidence for obtaining success is that there is limited competition in the generic sterile injectables market, leading to an opportunity for a new player.  This is due to shortcomings in manufacturing these drugs due to issues with raw materials, quality: manufacturing issues, loss of manufacturing site, increased demand, discontinuation, and quality: delays/capacity. We have the expertise to avoid these shortcomings.

Figure 5. Current Room for Competition

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