Regulations favouring generic products and wider health insurance coverage by governments and private bodies are expected to boost generic consumption, analysts predict.
Frost & Sullivan expect the generic pharmaceutical market to peak this year after the patent cliff left ‘blockbuster’ drugs worth $150 billion facing generic competition.
Aiswariya Chidambaram, Research Analyst at Frost & Sullivan, said there were lucrative opportunities for generic manufacturers and “careful choice of product segments and appropriate time of entry” will allow them to “sustain amidst intense competition”.
The global generic market was estimated to be worth $123.85 billion in 2010, growing at an annual rate of nearly ten per cent.
The US, Germany, UK, France, Japan, Canada, Italy and Spain are the top eight global markets and account for 80% of total worldwide sales.
In Europe, high generic penetration in Germany and the UK provides very little growth opportunity. Markets such as France, Italy and Spain do offer growth opportunities, but researchers warn pricing policies, incentive schemes and regulatory frameworks pose market access challenges.
The two largest therapeutic areas are currently Central Nervous System and cardiovascular, accounting for nearly 38% of the global market. However, analysts predict rheumatology, oncology and respiratory are likely to witness significant growth in coming years.
Analysts predict that the diversification of product portfolios, vertical integration across the value chain and the potential of emerging markets will be the main drivers of acquisitions growth by generic companies.
Also, an increase in the number of partnership deals by generic companies is expected by Frost & Sullivan in the future as reliance upon M&A, rather than organic growth to compete against industry competitors is sought.