New analysis from Frost & Sullivan’s Generic Pharmaceuticals Market–A Global Analysis research suggests that the global generic pharmaceuticals market is likely to witness strong growth in the next few years owing to the patent expiration of key blockbuster drugs and the judicious cost containment efforts of governments and healthcare service providers worldwide.
At the same time, the balance in terms of healthcare expenditure and sales revenue is poised to shift from developed to emerging markets such as India, China, Brazil, Russia, Turkey and South Korea, as huge potential still remains untapped in these countries.
The report finds that the market earned revenues of $123.85 billion in 2010 and estimates this to reach $231.00 billion in 2017 at a compound annual growth rate (CAGR) of 9.29 per cent from 2011 to 2018. Regions covered in the research include the US, Europe (Germany, the United Kingdom, France, Spain and Italy) and Asia (India and China).
According to a research analyst from Frost & Sullivan, “The patent expiry of several major blockbuster drugs between 2010 and 2017 will fuel the growth of the global generic pharmaceuticals market. The trend is shifting towards less competitive, yet commercially attractive segments such as difficult-to-produce generics, speciality generics and biosimilars.”
Leading global generic pharmaceutical manufacturers have been proactive in forging strategic alliances with branded pharmaceutical companies for marketing rights and exclusivity in producing generic versions of blockbuster drugs such as lipitor, cozaar and crestor, among others. Market leaders such as Teva, Sandoz and Mylan are increasingly focused on biosimilars, as this segment provides a competitive edge and presents huge profit margins.
While these are positive signs for market participants, a potential dampener is the progressively stringent regulations and price control measures being imposed by governments. These have tended to squeeze profit margins for generic manufacturers.
The research analyst stressed that the increased prevalence of chronic disorders, newly reported diseases and ageing populations have resulted in tremendous pressure. This weight is being placed on governments to implement cost containment measures and curb rampant healthcare expenditure.
As competition intensifies, generic drug manufacturers will have to make careful choices about the product segments that they wish to compete in and the appropriate time of entry into the market.
The source pointed out that large multinational generic firms need to adopt a differentiated approach by opting for products with technologically challenging formulations, products that require significant regulatory support, and products with limited availability of active pharmaceutical ingredients (APIs). Small- and medium-sized firms should focus on products with relatively higher profit margins.