Generic drugs contain the same active ingredients and are identical in dosage, safety, strength, route of administration, quality, performance and intended use as their branded counterparts. They provide lower cost alternatives to branded drugs, enabling patients to access treatment at an affordable price. They are approved by stringent regulatory authorities and manufactured by adhering to good manufacturing practices.
The Generic Drugs market is estimated to be valued at US$ 439.37 Bn in 2023 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Increasing number of patent expiries of blockbuster drugs is expected to drive the growth of the generic drugs market. For instance, between 2015 and 2022, blockbuster drugs like Lipitor, Nexium, Prilosec, Namenda, among others will lose patent protection globally. This is expected to lead to increased competition from generic drug manufacturers. Additionally, health administrations across countries are promoting the use of generic drugs to reduce healthcare costs. For example, mandated generic substitution and generic reference pricing policies in Europe encourage patients to opt for low-cost generic alternatives. Further, increasing penetration of health insurance enabling access to affordable treatment options is also expected to aid market growth over the forecast period.
SWOT Analysis
Strength: Generic drugs have lower costs compared to branded drugs. They save up to 80% costs for patients and governments. Generic drugs do not require extensive RD and clinical trials which allows them to reduce the price significantly. There is a huge patient base suffering from chronic diseases who rely on affordable generic drugs for continuous treatment.
Weakness: Generic drugs may lack innovative features and packaging of branded drugs which can impact patient satisfaction and preference levels. Some generic drugs also face issues regarding quality standards and bioequivalence with branded counterparts which raises safety concerns.
Opportunity: With patents of many large selling branded drugs expiring, there is a massive opportunity for generic manufacturers to launch generic versions. The increasing burden of healthcare costs also drives demand for more affordable generic substitution. Emerging markets like Asia Pacific and Latin America offer huge scope with low generic consumption currently.
Threats: Strong lobbying from branded pharma companies tries to extend patents or delay generic launch poses threats. Price control policies and regulatory measures aimed at cost containment may impact profits for generic players.
Key Takeaways
The global generic drugs market is expected to witness high growth, exhibiting CAGR of 5.4% over the forecast period, due to increasing healthcare cost burden and need for more affordable treatment options. The market size for 2023 is USD 439.37 bn.
The Asia Pacific region is expected to grow at the fastest rate owing to rising incomes, growing patient population and focus on healthcare reforms to expand access in countries like India, China and Indonesia. The U.S. currently dominates accounting for over 40% share due to its paradigm shift towards generic substitution to cut healthcare costs.
Key players operating in the generic drugs market are Mylan N.V., Novartis International AG, Pfizer, Inc., Allergan Plc, Sun Pharmaceuticals, Fresenius Kabi, Sanofi, Endo International, Lupin Ltd., Abbott Healthcare, AstraZeneca Plc, and Novo Nordisk. Major players are focusing on mergers, acquisitions and partnerships for business expansion in high growth markets.
