Drug patents expiry to give generic pharma market shot in arm

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The patent expiry of several major 'blockbuster' drugs, coupled with other factors, will fuel growth of global generic pharmaceuticals market by 2017, research firm Frost & Sullivan said.

"Imminent patent expiry of key blockbuster drugs is expected to benefit generics manufacturers. The global generic pharmaceuticals market is likely to witness strong growth in the next few years owing to the patent expiration of key blockbuster drugs, and the judicious cost containment efforts of governments and healthcare service providers worldwide," a global analysis research report from Frost & Sullivan said.

The healthcare expenditure and sales revenue are also poised to shift from developed to emerging markets such as India, China, Brazil, Russia, Turkey and South Korea, as huge potential still remains untapped in these countries, the analysis said.

The research finds that the markets earned revenues of USD 123.85 billion in 2010 which are likely to touch USD 231 billion in 2017 at a compound annual growth rate (CAGR) of 9.29 per cent from 2011 to 2018.

Regions covered in the research include the United States, Europe (Germany, the United Kingdom, France, Spain and Italy) and Asia (India and China).

"The patent expiry of several major blockbuster drugs between 2010 and 2017 will fuel the growth of the global generic pharmaceuticals market," said a Frost & Sullivan research analyst.

"The trend is shifting towards less competitive, yet commercially attractive segments such as difficult-to-produce generics, speciality generics and biosimilars," he said.

Leading global generic pharmaceutical manufacturers have been proactive in forging strategic alliances with branded pharmaceutical companies for marketing rights and exclusivity in producing generic versions of blockbuster drugs such as Lipitor, Cozaar and Crestor, among others.

Market leaders such as Teva, Sandoz and Mylan are increasingly focused on biosimilars, as this segment provides a competitive edge and presents huge profit margins, the report said.

While these are positive signs for market participants, a potential dampener is the progressively stringent regulations and price control measures being imposed by some governments.

These have tended to squeeze profit margins for generic manufacturers, Frost & Sullivan said. As competition intensifies, generic drug manufacturers will have to make careful choices about the product segments that they wish to compete in and the appropriate time of entry into the market, it said.

"Large multinational generic firms need to adopt a differentiated approach by opting for products with technologically challenging formulations and products that require significant regulatory support, and products with limited availability of active pharmaceutical ingredients (APIs)," the research analyst added.