The Abbreviated New Drug Application or ANDA, established in 1984 by the Hatch-Waxman Act, allows OTC (Over-the-Counter) generic drug companies to conduct testing prior to a branded drug’s patent expiration date. This creates an opportunity for OTC generic drug manufacturers to chip away at a branded drug’s market share. A successfully submitted ANDA allows OTC generics to be marketed to the public shortly after patent expiration, reduces significant clinical testing costs and results in the award of a 6-month grace period as the only generics competitor in the market.
Speed to Market
These factors can lay the foundation for a substantial profit center in the OTC generics market. Because speed to market is a vital component of success, partnering with an experienced CDMO, complete with an in-house FDA certified formulation development facility, can streamline the whole process dramatically. Given the existing opportunities in the generics market, selecting the right partner is an important strategic decision.
Establish Bio-equivalency Requirement
Additionally, costs are reduced significantly as a benefit to being first to file an ANDA with the FDA. Prior to enactment of the Hatch-Waxman Act, OTC generic manufacturers had to rely on published scientific literature in order to prove safety and efficacy of their product. This meant expensive and redundant clinical testing had to be conducted. With the Hatch-Waxman Act in place, as long as an OTC generic drug manufacturer can establish that their product is bio-equivalent to the innovator’s product, they are able to rely on the safety and efficacy of the clinical trial data of the original New Drug Application (NDA) submitted by the branded drug company.
6 Month Grace Period to First to Filer
Lastly, an ANDA submitted to and approved by the FDA grants a grace period of 6 months to the submitting OTC generic manufacturer. As a result, a competitive edge is automatically created. First to file OTC generics are then able to freely and aggressively market their OTC generic in order to capture a substantial amount of market share of the branded drug.