FDA Announces New ANDA Prioritisation Pilot to Support U.S. Generic Drug Manufacturing and Testing

The FDA announced a new pilot program to prioritise the review of abbreviated new drug applications (ANDAs). This initiative aims to encourage investment in U.S. drug manufacturing, research, and development, while also strengthening the domestic pharmaceutical supply chain. The program will offer faster reviews for generic companies that manufacture and test their products in the U.S. Currently, over half of the pharmaceuticals used in the U.S. are manufactured overseas, and the U.S. relies heavily on foreign sources for active pharmaceutical ingredients (APIs). As of 2025, only 9% of API manufacturers are in the U.S., while China and India account for 22% and 44%, respectively. Additionally, pivotal studies for drugs, including bioequivalence testing, are increasingly performed outside the U.S., which weakens the country's pharmaceutical infrastructure. The FDA's pilot program incentivises U.S. generic drug manufacturing and testing. ANDA applicants who conduct bioequivalence testing in the U.S. and whose products are made in the U.S. using exclusively domestic sources for APIs are eligible for priority review. This program aligns with the FDA's commitment to revitalising American industry and ensuring affordable access to medications for American consumers. It complements the "Onshoring Manufacturing of Drugs and Biological Products" meeting, where stakeholders discussed incentives, such as expedited reviews, to encourage investment in U.S. manufacturing and research and development. Details here Implications for Indian Generic API and FDF Developers

  1. The pilot program specifically aims at the significant market share held by Indian manufacturers, as 44% of API manufacturers for the U.S. are based in India, compared to just 9% in the U.S.
  2. It creates a competitive disadvantage for Indian FDF manufacturers, as their Abbreviated New Drug Applications (ANDAs) will not qualify for the priority review incentive unless they move all required manufacturing, API sourcing, and bioequivalence testing to the U.S.
  3. The pilot aims to reduce U.S. dependence on foreign drug manufacturing and testing, a sector that heavily involves India, potentially challenging Indian firms' dominant position in the U.S. generic market.
  4. Indian FDF developers may need to make substantial strategic investments in the U.S., such as setting up domestic manufacturing facilities and conducting bioequivalence studies locally, to stay competitive through the faster review pathway.
  5. The incentive highlights that relying on foreign sites, including those in India, leads to slower reviews and higher costs for taxpayers because of more expensive and time-consuming foreign FDA inspections.
  6. By encouraging the onshoring of pivotal studies like bioequivalence testing, the pilot directly challenges the increasing trend of conducting such trials outside the U.S., a practice often used by foreign generic developers.
  7. The FDA's action, along with the earlier PreCheck program, indicates a sustained U.S. government commitment to strengthening the domestic pharmaceutical supply chain, highlighting a potential long-term risk to India's current export model.
  8. Indian API manufacturers could see a decrease in demand from U.S. generic drug companies seeking the priority review incentive, which specifically requires using only domestic sources for APIs. However, the regulatory scenario required for API source change will make it challenging for the FDF player to switch the source immediately. Hence, it may have no immediate impact, but the pilot program could have long-term implications if it demonstrates positive results from the U.S. government's perspective.
  9. The change in prioritisation could postpone market entry for Indian-made generics compared to their new U.S.-sourced rivals, affecting their first-to-market edge on certain drugs. This will be more applicable to old and mature products. The products that are driven by P-IV litigations, NCE-1 filings, and CGT designations will not have much impact, as this type of ANDA filing regulatory review will be as per standard timelines. For example, after 30 months of stay, the FDA cannot stop the approval of a generic if the ANDA is compliant in all aspects. In most cases, generic launches will be litigation-driven and occur on the agreed-upon settlement date.
  10. However, this move might compel Indian companies to diversify their global market strategies or accelerate their existing plans to become more vertically integrated in the U.S. market, rather than simply exporting there.


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