Patent expiries worth US$150m present opportunities for generics, says Frost & Sullivan
Generics focus to shift towards difficult to produce drugs, specialist products and biosimilars
While the global generic pharmaceuticals market is expected to peak in 2012 owing to the patent expiry of several leading brands such as Seroquel and Lexapro, regulations favouring generics and wider health insurance coverage by governments and private organisations are expected to boost generic consumption, says Frost & Sullivan in its latest report.
According to the Global Generic Pharmaceuticals Market report, this sector, estimated to be worth US$123.85bn in 2010, is growing at a compound annual growth rate of 9.3%.
The top eight markets for generics – the US, Germany, UK, France, Japan, Canada, Italy and Spain – account for 80% of total generic drug sales worldwide.
In Europe, mature markets such as Germany and the UK have very high rates of generic penetration and therefore offer minimal growth rates. While less mature markets such as France, Italy and Spain have seen generics penetration increase steadily, pricing policies, incentive schemes and increasingly stringent regulations continue to pose a challenge with regard to market access and profit margins, the report states.
‘The focus of market participants is shifting towards less competitive yet commercially attractive segments such as difficult-to-produce drugs, specialist products and biosimilars,’ says Aiswariya Chidambaram, research analyst at Frost & Sullivan.
Central nervous system (CNS) and cardiovascular are the two largest market segments for generics, constituting nearly 38% of the global market. The patent expiry of several key anti-psychotics and anti-depressants will contribute to rapid growth of the CNS drugs market between 2010 and 2017, the report suggests.
Rheumatology, oncology and respiratory therapeutic areas are likely to see significantly high growth rates, while diabetes and genito-urinary/hormonal drugs are expected to decline by the end of 2017.
The top five generic pharmaceutical companies (Teva, Sandoz, Mylan, Watson and Stada Arzneimittel) accounted for 39% of the global generic pharmaceuticals market in 2010. The top three registered growth rates of 16%, 14% and 11% respectively.
Frost & Sullivan expects a significant rise in the partnership deals of generic pharmaceutical companies in the future, since many such companies rely on M&A rather than organic growth as a faster means to consolidate and expand their market shares.
Diversification of product portfolios, vertical integration across the value chain, and the untapped potential of the emerging markets are the main drivers of acquisitions growth of generic pharmaceutical companies.
