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A generic drug has the same active pharmaceutical ingredient (API) as the original, but it may differ in some characteristics such as the manufacturing process, formulation, excipients, color, taste, and packaging.
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Generic Active Pharmaceutical Ingredients (APIs): Importance and Market Trends
Every drug you’ll come across is made using two core components – an Active Pharmaceutical Ingredient (API), also referred to as the central ingredient, and an excipient, which is simply a chemically inactive substance within the drug that helps carry the medication into your system. While an excipient can be any common substance, such as mineral oil or lactose, the APIs are what make the medication exhibit its fundamental properties.
This article highlights the importance of APIs to patients, their development and importance, and the current market trends concerning their manufacture and supply.
What are Generic Active Pharmaceutical Ingredients (APIs)?
Simply put, Active Pharmaceutical Ingredients (APIs) are the part of a drug that produces its intended effects. They are mostly synthetic substances/chemicals that are used in a carefully measured and formulated ﬁnal pharmaceutical dosage. Certain drugs, such as those used in combination therapies, may have more than one active ingredient to treat various symptoms of an illness, and might also act in different ways.
APIs are often confused with the term ‘raw material’ and are sometimes also used as synonyms. However, there is a difference between the two. Raw materials are the chemical compounds which serve as the base from which APIs are made. This mechanism does not involve a single reaction; rather raw materials undergo a series of chemical processes and intermediates after which a purified and refined API is developed.
Where are Generic APIs Developed?
APIs are traditionally manufactuered by the pharmaceutical companies locally. However, recent years have seen a shift, where many corporations have outsourced their manufacturing processes to overseas companies in efforts to reduce the costs. Despite being an economical decision, this has resulted in major changes as to how drugs are regulated, giving rise to more stringent guidelines and inspections.
What is the Importance of Generic APIs to Patients and Pharmacists?
First off, generic APIs prevent drugs from being mistaken for one another, especially when prescriptions are distributed. To make sure there is no confusion and fatal error, the US Food and Drug Administration (FDA) must approve every proposed brand name or non-generic API for a drug, which will be discussed in detail in the upcoming section.
Secondly, government officers, healthcare workers, researchers, and those writing about a new active compound always use the drug’s generic name, since it refers exclusively to the drug, not to any particular brand or a specific product.
Thirdly, generic APIs help pinpoint the patient and vendor to the particular drug that is required. Sometimes a particular brand’s medicine is not available, in which case the pharmacist will enquire the generic API and provide the patient an alternate brand containing the same active ingredient.
How Do Generic APIs Differ from Non-Generic APIs?
Generic APIs refer to medications being sold using the name of the active ingredient, also known as generic drugs. Non-generic APIs refers to medications that use the same active ingredient, or APIs, as the original generic medication, but sell the drug using a brand-name instead of the name of the API.
Simply stated, the brand name, or non-generic API, is the name the company gives to their drug, and is generally easy to understand and use by common people for sales and marketing. The generic name, or generic API, is the name of the active ingredient contained within the drug.
In the US, the generic name is allocated by an official body known as the United States Adopted Names (USAN) Council, whereas the brand name is devised by the company asking for approval of the drug, the latter being their exclusive.
For instance, a common anti-seizure drug is phenytoin, which is the generic name (API) and Dilantin is the brand name for the same drug.
Brand-name drugs can only be manufactured and sold by companies that hold the patent for the drug, and these can be bought over-the-counter with a prescription. After the patent expires, a generic version of the brand-name drug can be manufactured and sold. These drugs cost between 30 to 95 percent less than their brand-name equivalents, based on generic competition.
However, the generic version must contain the same active ingredient/s as the brand name. Also, generic drugs must not resemble any other drugs sold in the US, due to trademark laws; the flavor, color, shape, and any additional inactive ingredients must also be unique.
Are Generic Medications Safe to Use?
The FDA states that generic medications must be as effective as their brand-name counterparts, therefore having the same risks and benefits. They have issued certain strict requirements for a generic drug being the same as the brand-name drug in terms of:
- Mode of action
- Method of using
- Method of ingestion
- Ailment it treats
To further ensure safety, quality and effectiveness of the drugs, the FDA, including a detailed scientific analysis on the drug’s performance and ingredients, puts all generic drugs through a review process. Moreover, manufacturing plants producing generic drugs must maintain the same superior standards as those of a brand-name drug production unit – about 3,500 on-site inspections are conducted every year.
Another interesting aspect is that almost half of all generic drugs are being produced by brand-name companies themselves. They simply produce copies of their own drugs, or another company’s brand-name drugs, and sell them under name of the generic API.
Why is the Cost of Manufacturing Drugs in the US Much Higher than Other Countries?
For starters, in the US, negotiations with respect to drug prices occur between manufacturers and individual insurers – there is no involvement of the government. Insurers have developed a way for consumers to have choice and save money. While expensive drugs can still be covered, drugs in stage one have much lesser copay costs as compared to drugs in higher stages of development and usage.
When consumers discover that they’re paying $100 for a level two drug instead of $20 for a level one option, they ask their physician for a cheaper alternative. Manufacturers with a higher tiered drug make use of this opportunity and respond by crafting prescription coupons rather than lowering the general cost of the drug. So when consumers visit the pharmacy, they pay $20 for the drug, and the manufacturer pays the remaining $80 of their copay.
Secondly, drug companies in the US can reach out to users and sponsor drugs directly, without the need for advertising. This isn’t allowed in other countries. This creates demand and helps companies acquire hundreds of millions of dollars in advertising, which they recover by charging highly for the drugs.
While this system might reduce the out-of-pocket burden on consumers, manufacturers shift the overall costs back on insurers by simply increasing the price. These extra costs are then adjusted into the higher premiums charged to consumers.
How are Generic APIs Developed?
When it comes to development, API manufacturersmust firstly consider how to make the chemical compound (raw material) which will eventually become an API. Factors affecting the quality of the API, such as the degree of concentration and optimum temperature, are also considered. Once the basics are finalized, a series of preliminary experiments are performed to determine exactly how to make the raw material. Once developed, the latter undergoes a series of processes and intermediates to ultimately manufacture a large quantity of APIs. Quality control experiments are then conducts a testing laboratory to determine whether the API is ultrapure. After testing, quality assurance staff assesses the credibility of the entire manufacturing process, and confirms whether it is in accordance with FDA guidelines.
What Are Generic API Development Or Manufacturing Requirements?
As highlighted in the development section, the pharmaceutical industry is changing rapidly. Companies are no longer involved in handling every single step of the drug-manufacturing process, and nor is a single company involved in creating the API, building the capsule, and packaging the medicine.
As a means of ensuring public and patient safety, relevant governing institutions have established stringent screenings to ascertain quality and prevent defects in medications. Violating any of these instituted standards may result in fines or extremely expensive recalls for the pharmaceutical companies behind the manufacturers.
Manufacturers of generic APIs must adhere to certain standards which will help ascertain how potent the API in each drug is. These standards may vary significantly from brand to brand, for instance in terms of the test methods they use, resulting in various potencies. However, in all cases, manufacturers must verify the potency of their drugs via real-life patients and under laboratory conditions, as required by the FDA.
A very important aspect that API manufacturers must consider is the quality of APIs, since this has a substantial effect on the efficacy and safety of medications. Below par or compromised APIs can lead to serious health issues, resulting in chronic illnesses and even death.
Even when outsourced, APIs must adhere tothe strict regulations and guidelinesof the country they are dispatched to; overseas API manufacturing plants are still inspected by the US FDA.
What Is The Need For A Generics Class Implementation?
A generics class implementation system will help clarify the quality-by-design approach to regulatory authorities, signifying how the manufacturing process has been formulated while keeping in check quality criteria and other essentialattributes pertaining to the active ingredient.
How Do You Ensure Smooth Technology Transfer In API Manufacturing?
Technology transfer can be a laborious and complex process that requires teamwork, effective communication, and the utmost ability to foresee and resolve any possible obstacles that might arise during the process. Usually, a chemical process is transferred either to a different company with their own specific processes and protocols, or it can be the transfer of a project from an overseas Contract Manufacturing Organization (CMO) which, again, will have their own regulations and processes.
Effective and efficient transfer of technology takes place only when strict protocols are developed to share the knowledge and capabilities of a particular API manufacturing process.These foundations also lay the groundwork for the next stages of development, and allow Contract Development and Manufacturing Organizations (CDMOs) to allocate resources and effectively complete their work.
Hence, manufacturers of APIs must have a reliable technology transfer protocol to ensure no critical information is lost and no time is wasted when transferring technology to another firm or site. This guarantees a smooth process and helps attain the confidence of the sponsoring firm and the contractors associated with the transfer.
Certain key considerations to ensure an effective technology transfer are as follows:
- Sponsors must transparently share batch records, and any pertinent information related to obstacles and challenges.
- Manufacturing engineers must be directly involved with technical managers to oversee optimization, scale-up processes, and other critical steps.
- Chemists and GMO specialists must be on the same page regarding the use of raw materials, ensuring appropriate analytics and master batch records are compiled.
- Research and development chemists and GMP specialists must work together to get the scale-up process running, and must work with engineers to ensure the appropriate equipment and other instruments are available.
Market Trends in Generic APIs
Which Country is the Largest Producer of Generic Drugs?
Even though many pharmaceutical companies are centered in the US and UK, most API manufacturers are based overseas, including Asia, and particularly China and India.
As a means of cutting back on costs concerning equipment, infrastructure and employees, many companies are opting to outsource their manufacturing. The most prominent example is that of AstraZeneca Pharmaceuticals which operated several manufacturing units in the US. Now, only 15% of their APIs are produced within the country, and they also plan to finish this small percentage by outsourcing all of their manufacturing overseas.
While this does help produce drugs at an economical scale, a significant concern about the quality and safety of these APIs exists.
Which Is The Biggest Generic Drug Company?
The chief manufacturer of APIs is TEVA Pharmaceuticals, with the drug industry’s largest portfolio featuring more than 3,500 API products, making it the largest pharmaceutical company worldwide.
Established in 1901, TEVA has been providing healthcare workers, patients and caregivers accessible generic and original products. With generic sales amounting to $ 9 billion, almost 200 million individuals in over 60 countries rely on the company’s superior quality medicines on a daily basis.
TEVA Pharmaceuticals invests heavily in research and development (R&D) of generic drugs and biopharmaceuticals, relying on their legacy of over a century of formulating innovative methods to facilitate patients and improve their quality of life.
Top Suppliers of Generic APIs
Other industry leaders of generic APIs include:
- Sun Pharmaceutical Industries Ltd: Generic Sales $ 4 Billion
- Pfizer: Generic Sales $ 3.5 Billion
- Novartis International: Generic Sales $ 8.6 Billion
- Fresenius Medical Care: Generic Sales $ 3.2 Billion
- Aurobindo Pharma: Generic Sales $ 2.3 Billion
- Aspen Pharma: Generic Sales $ 2 Billion
- Lupin: Generic Sales $ 2.2 Billion
- Amneal Pharmaceuticals, Inc: Generic Sales $ 1.8 Billion
Each of these manufacturers specializes in diverse APIs, while some also offer generic products.
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