Generic Drugs: The Global Market–Focus on the Americas

Report Highlights

• The global generics market is estimated at about $225 billion in 2011. By 2016, it is expected that the value of the total global generics sector will have risen to $358 billion, representing more than 18% of all pharmaceuticals, a projected compound annual growth rate (CAGR) of 9.7% between 2011 and 2016.
• The North American market is estimated to reach nearly $73 billion in 2011 and is expected to increase at a 7.9% compound annual growth rate to reach nearly $107 billion in 2016.
• The United States is currently spending almost $250 billion a year for prescription drugs. If drugs were sold in a competitive market, without government-imposed patent monopolies, this might achieve savings up to $200 billion a year.

INTRODUCTION

STUDY GOALS AND OBJECTIVES

The aim of this report is to provide detailed market, technology, and industry analyses to help readers quantify and qualify the market for prescription generic drugs.  Important trends are identified and sales forecasts by product categories and major country markets are provided through 2016; these are based on industry sources and considered assessment of the regulatory environment, healthcare policies, demographics, and other factors that directly affect the generic drug market.  The wider economic environment is also taken into account.

The report examines strategies employed by companies specializing in generics to meet the challenges of this highly competitive market, while also summarizing strategies employed by “originator” companies to forestall generic competition.

REASONS FOR DOING THE STUDY

This is a time of growth and change for the generic pharmaceuticals sector.  Major aspects that combine to create an opportunity for an up-to-date market analysis include the following:

• The demand for generics is increasing steadily because of pressure to control healthcare costs.  At the same time, fierce price competition in this area has created difficulties for some companies because of slashed profit margins.  The main result has been a wave of merger and acquisition (M&A) activity, and the rise of “supergenerics,” offering added value as well as low prices.  Not all traditional companies are positioned to exploit this trend.
• A major growth driver for the generics sector is the fact that several blockbuster pharmaceutical brands are coming off-patent and are therefore open to generic competition—the phenomenon widely known as the “patent cliff.”  But the originator companies are deploying formidable strategies to protect their franchises, including marketing their own branded generics.
• With first-generation biopharmaceutical products reaching the end of their patent lives, a whole new market field—biogenerics or biosimilars—is opening up for those generics companies capable of (or prepared to buy-into) the technological expertise required.
• The international landscape is changing for generics as for all pharmaceuticals.  China, India, Russia, Mexico, and Brazil are among the rising markets for generic activity.

SCOPE OF REPORT

This report discusses the implications of all the above-mentioned trends, in the context of the current size and growth of the generics market, both in global terms and analyzed by the most important national markets.  The nature and structure of the generics industry is discussed, with profiles of the leading 20+ generics companies, and an update on M&A activity.  Five-year sales forecasts are provided for the national markets and the major therapeutic categories of products involved.

The report presents overall market size estimates and analysis for the overall global market, as well as more detailed market coverage of the three major segments of the global market: the American market, the European market, and the Asian market.  The American market coverage focuses on the largest markets of North and Latin America (the U.S., Canada, Brazil, and Mexico); European market coverage focuses on the markets in France, Germany, Italy, Spain, and the United Kingdom, as well as an analysis of the Russian market; and Asia market coverage focuses on the three major markets of Japan, China, and India.

MARKET ANALYSES AND FORECASTS

Market figures are based on revenues at the manufacturer level and are projected based on 2011 dollar value without attempting to predict the effect of inflation/deflation.

Therapeutic categories quantified and forecast include antibacterials, antidepressants, anticancer agents, anti-arthritics, cardiovascular drugs (e.g., hypolipidaemics and antihypertensives), and drugs for respiratory conditions, including asthma and COPD.

METHODOLOGY

Both primary and secondary research methodologies were used in preparing this study.  Primary research includes interviews with leading individuals in generics companies, industry associations, and regulatory bodies.   Sources of published data include company annual reports, SEC filings, government and industry publications, literature searches, industry journals, and other commercial publications.  Data for market estimates and forecasts are pooled from a range of sources, and are critically assessed by BCC Research.

INTENDED AUDIENCE

This report is designed to satisfy the information needs of a wide variety of individuals involved in the generics marketplace, including company senior management executives seeking to base their strategic decisions on the best available information on market forces and trends.  However, it is also aimed at managers and executives in marketing, research, planning, and sales departments who need readable, comprehensive, and up-to-date background on the marketplace in which they are operating.

INFORMATION SOURCES

Sources of information included marketing strategists, industry executives, government agencies and regulatory bodies, and surveys of physicians and pharmacists.  Company annual reports and SEC filings, journal articles, and data from healthcare institutions were also mined, as well as publications of relevant trade associations such as the Generic Pharmaceutical Association (GPhA) and the European Generic Medicines Association (EGA).

ANALYST CREDENTIALS

Paul Evers has been involved in analyzing pharmaceutical and medical markets for 20 years.  He is the author of two previous reports on the generics marketplace as well as analyses of major therapeutic categories and the pharmaceutical regulatory environment.

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DISCLAIMER

The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or its use.