Trend No. 1: Expiration of Patents
In 2012, more than 40 brand name drugs, valued at $35 billion in annual sales, lost their patent protection. As of 2011, generic pharmaceuticals filled 80% of prescriptions dispensed in the U.S. but consumed just 27% of total drug spending.1 The trends for increased market share growth bodes well for generic pharmaceutical companies as patents for more than $150 billion of major branded drugs will have expired between 2010 and 2017.
Trend No. 2: Shift From Developed to Emerging Markets
Based on data from IMS Health, the global generic drug market was estimated at about $242 billion in 2011, accounting for some 25% of the global market and is expected to grow to 35% or approximately $430 billion by 2016. The top eight global markets — U.S., Germany, France, United Kingdom, Canada, Italy, Spain and Japan — account for 80% of the total generics market. Even though emerging markets such as Brazil, Russia, India and China have relatively low generic penetration at the present time, regulations favoring the use of generics will enhance their potential growth by 15% to 20% annually.2
Trend No. 3: An Aging Population Worldwide
There are more than 7 billion human beings living on earth with a median age of 28 years and an average life expectancy of approximately 67 years.3 Considering that Brazil, Russia, India and China account for nearly 3 billion or approximately 40% of the world’s population, an increasing number of the world’s population will utilize generic pharmaceuticals to enhance the quality and length of their lives.
Trend No. 4: Increases in Treatment of Chronic Diseases with Biologic Drugs
Biologic drugs are derived from living materials — human, animal or micro-organism — and are difficult to manufacture and replicate. They include vaccines, gene therapy and blood components that are used to treat cancer, HIV/AIDS, Alzheimer’s disease, arthritis and other life threatening diseases. Biosimilar drugs, which are the generic form of a biologic drug, are currently growing at an annual rate of 40% and will represent approximately $60 billion in annual spending by 2016.4 Recently the FDA has set guidelines for biosimilar product development and approval in response to this trend.
Trend No. 5: Cost Containment by Governments and Health Care Providers
Calling responsible medicine use an “urgent imperative” for the global health system, the IMS Health Institute recently recommended the increased use of low-cost and safe generic drugs where available to address the intensifying efforts to contain costs by governments and health care service providers worldwide.5 As a result of this increasing awareness, cost effective and quality drug therapy via generic medications will continue to grow for the benefit of consumers worldwide.
1. IMS Health, National Prescription Audit, Dec. 2011
2. Frost & Sullivan, Generic Pharmaceuticals Market- A Global Analysis. Dec 2011.
3. Index Mundi, World Demographics Profile 2012.
4. Grant Thornton, Insights Into the Biosimilars Market: An Overall Perspective, Feb. 2013.
5. IMS Institute, Advancing the Responsible Use of Medicines: Applying Levers for Change, Oct. 2012