LONDON, Aug. 23, 2016 /PRNewswire/ -- Increased life expectancy, a growing aged population cohort, and the higher incidence of chronic lifestyle-related diseases are encouraging the use of generic pharmaceuticals as governments and healthcare service providers strive to contain costs. Impending patent expiries of key drugs and a promising pipeline of next-gen high value-added biosimilars too will sustain double digit growth for generics. On the flip side, increasing global competition, downward pricing pressure, and tightening regulations will challenge market participants. Further, professionals and patients often prefer branded drugs over generics. Using innovative production platforms to develop lower cost biosimilars as well as a premium priced portfolio can offer greater mileage to generics companies.
Recent analysis from Frost & Sullivan, Global Generic Pharmaceuticals Market (http://frost.ly/ps?!), finds that generic drugs earned revenues of US$330.87 billion in 2015, with a 37 percent share of the global pharmaceutical market. This is expected to reach US$557.37 billion by the end of 2020. In fact, the generics segment is growing at a compound annual growth rate of 11 percent for this period, while the global pharmaceutical market is growing at a lower CAGR of 9.8 percent. By 2020, speciality and biosimilars will account for up to 70 percent share of generics.
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"Patent expiration and increased usage of traditional generic drugs are curbing the cost of drugs, compelling the industry to invest in specialty medicines," said Frost & Sullivan Transformational Health Industry Manager Sanjeev Kumar. "With innovation and technology, generics can be enhanced to deliver additional benefits. Furthermore, to beat the competition, several generics companies in developed countries are transforming themselves from low-margin formulation to high-margin formulation manufacturers."
The US remains the largest generic pharmaceuticals market, characterised by high profit margins, high levels of generic prescription by doctors, strong intellectual property legislations, retailers' purchasing price, and pricing levels determined by demand. Europe may emerge as a game changer with the early adoption of biosimilar drugs.
"The next big opportunity, however, lies in emerging markets," noted Kumar. "The availability of cheap labour, inexpensive production methods, skilled personnel, and sound infrastructure make India and China the most sought after destinations for import of generics by developed markets."
While the economic boom and healthcare reforms make China lucrative, India is a major market for consumption as well as manufacturing of generics. The country targets exports of more than 40 percent to the US each year. Dominated by branded generics, the Indian market will see higher demand after the implementation of universal health coverage.
Global Generic Pharmaceuticals Market is part of the Life Sciences Growth Partnership Service program. The aim of this research service is to analyse the global generic pharmaceuticals market with individual focus on developed as well as emerging economies. The research maps key trends and dynamics shaping the industry sector, and provides strategic recommendations and conclusions for the success of the market participants. It provides in-depth knowledge of major national markets, therapeutic areas and organisations presenting significant growth opportunities for generics. The study also helps understand the impact of regulations on the market, and outline industry consolidation trends that are shaping the future of generics.
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SOURCE Frost & Sullivan