Frost & Sullivan Looks at the Prospects of Global Generic Pharmaceuticals Market
Patent Expiry of Blockbuster Drugs worth $150 billion presents lucrative opportunities for generic manufacturers
While the global generic pharmaceuticals market is expected to peak in 2012 owing to the patent expiry of several leading brands, regulations favouring generics and wider health insurance coverage by Governments and private bodies are expected to boost generic consumption.
The Global Generic Pharmaceuticals Market was estimated to be $ 123.85 billion in 2010, growing at a compound annual growth rate of 9.3 per cent. The top eight global markets, namely the United States, Germany, the United Kingdom, France, Japan, Canada, Italy and Spain account for 80 per cent of the total generic drug sales worldwide.
In Europe, developed generic markets such as Germany and The United Kingdom have very high rates of generic penetration, presenting very minimal growth rates. While emerging markets such as France, Italy and Spain have seen the extent of generics penetration increase steadily, pricing policies, incentive schemes and regulatory framework still pose a challenge to the market participants with regard to market access and profit margins.
“Focus of market participants is shifting towards les competitive yet commercially attractive segments such as difficult-to-produce drugs, specialty products and biosimilars,” explains Aiswariya Chidambaram, Research Analyst at Frost & Sullivan.
Looking at the key therapeutic areas, Central Nervous System (CNS) and Cardiovascular are the two largest markets segments, constituting nearly 38 per cent of the global generic pharmaceuticals market. However, therapeutic segments such as Rheumatology, oncology and respiratory are likely to witness significantly high growth rates, attracting the attention of market participants.
The top five generic pharmaceutical companies accounted for 39 per cent of the share in the global generic pharmaceuticals market in 2010. Diversification of product portfolios, vertical integration across the value chain, and untapped potentials of the emerging markets are the main drivers of acquisitions growth of generic pharmaceutical companies. There will be a significant rise in the partnership deals of generic pharmaceutical companies in the future, since many generic companies rely upon M&A rather than organic growth to battle out the intense competition in the industry.
“Careful choice of product segments and appropriate time of entry into the market will enable the generic drug manufacturers to sustain amidst intense competition,” concludes Aiswariya Chidambaram.
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