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Generics Market – Likely To Continue to produce good growth through to 2016
The global generics market has produced good growth in recent years and, due to the trend of cheaper generics replacing branded pharmaceutical products when patents end, the market is likely to continue to produce good growth through to 2016. The last few years have seen a number of blockbuster drugs coming to the end of their patents, which has shown the speed with which generics can be introduced and dominate a previously locked up market. This change is happening because the switch to generics from branded drugs is highly cost effective, a very important factor for many nations trying to combat increasing health care expenditure. Generics also provide some poorer states with methods of obtaining effective drugs for a substantially lower cost.
The global generics market produced growth of 6.9% in 2011, a good rate of growth considering the continued global economic downturn. The global market has experienced a compound annual growth rate (CAGR) of 9.1% between 2007 and 2011.
The Americas market dominates the global market share, mainly led by the US, which currently provides 39.2% of the global market’s value. As the US market is highly monetized, and contains some of the largest pharmaceutical companies in the world, the battle over litigation and access for generics has been strong. Despite this, generic drugs have now gained a strong hold in the US pharmaceutical market in terms of market share.
The second largest regional market is that of the Asia-Pacific region, holding a share of 29.9%. The Asian market has developed quickly, as producers in the area have a less strict set of regulations to negotiate than in Europe or the Americas. This, coupled with the burgeoning economic development of China and India, has meant that the market has been growing rapidly.
Europe retains a market share of 21.8%. As Europe contains some very large pharmaceutical companies, some of the more developed markets in the region have developed more slowly than others, as many legal battles over patents are played out. However the region contains some highly developed generics markets which have helped to provide the market with moderate growth.
Despite generics companies making some very large gains in certain drug areas, the traditional pharmaceutical companies have also entered into the generics market to tap this revenue. However, this is far from universal, as some companies have been relying on R&D and their own blockbuster drugs to generate revenue. It has even led to the unusual situation where some companies are making generics of their own previously patented drugs in order to halt the gains of the generics companies.
One potential development in the market is entrants stemming from companies not traditionally based in pharmaceuticals or generics. Deals have been made by companies such as Fuji Film and Samsung that are looking to make their first steps into regional markets. A potential issue is that future R&D may be affected, as reduced revenues for traditional pharmaceutical companies can be affected by gains in generics.