The global generic drugs market provides more affordable alternatives to branded pharmaceutical products, which have lost patent protection. Generic drugs contain the same active pharmaceutical ingredients and are identical in strength, dosage form, and route of administration as the branded counterpart. They are comparatively less expensive than their branded alternatives. The adoption of generic drugs has helped drive significant cost savings for the pharmaceutical sector.
The Global generic drugs market is estimated to be valued at US$ 439.37 billion in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period of 2023 to 2030. Rising healthcare costs and patent expiries of blockbuster drugs have prompted patients and governments across countries to shift from expensive branded drugs to more affordable generic versions. Furthermore, generic drugs improve access to essential medicines for populations with limited financial resources.
Key Takeaways
Key players operating in the generic drugs market include Mylan N.V., Novartis International AG, Pfizer, Inc., Allergan Plc, Sun Pharmaceuticals, Fresenius Kabi, Sanofi, Endo International, Lupin Ltd., Abbott Healthcare, AstraZeneca Plc, and Novo Nordisk. Major companies are focusing on developing new generic drug products, geographical expansion, and acquisitions to strengthen their market position.
The global generic drugs market offers significant opportunities for pharmaceutical players due to increasing adoption in developing nations and growth of biosimilars. Moreover, patent expiration of numerous blockbuster drugs provides opportunities for generic manufacturers to commercialize novel drug products with lower costs.
Leading companies are actively pursuing global expansion strategies in key emerging markets like China, India, Brazil, Russia, and Africa to tap the growth potential. Companies are also expanding their manufacturing capabilities and product portfolio by acquiring smaller generic drug firms from different regions.
Market Drivers:
One of the major drivers of the generic drugs market is the patent expiration of blockbuster drugs. As patent protection expires, generic versions enter the market at significantly lower prices compared to branded drugs. This has prompted patients and governments worldwide to shift to more affordable generic alternatives. According to estimates, patent expiration of prominent drugs is expected to provide additional savings of over $100 billion over the forecast period.
Market Restrains:
Stringent regulations pertaining to the approval of generic drugs pose a potential challenge to market players. Generic drug applications require extensive documentation and clinical data to prove bioequivalence to the reference listed drug. Additionally, long approval timelines hinder the timely launch of generic equivalents. Manufacturers must also undertake costly post-marketing Bioequivalence studies mandated by regulatory bodies. Such regulatory hurdles push up compliance costs, acting as a key restraint for the generic drugs industry.
Segment Analysis
The generic drugs market is dominanted by oral dosage forms segment which accounts for more than 50% of the overall market share. This is because majority of the drugs have oral intake and it is the most convenient route of administration. Injectables account for the second largest share as they are preferred for certain therapeutic conditions such as cancer and autoimmune diseases where rapid drug action is needed. Topical and other segments such as ointments and creams hold relatively smaller market share.
Global Analysis
The North American region commands the largest share in the global generic drugs market owing to favourable regulatory policies and acceptance of generics. The United States alone captures over third of worldwide generics consumption due to supportive measures by the FDA to speed up generic approvals. Europe holds the second largest position driven by austerity measures taken by governments to cut healthcare costs. Asia Pacific is fastest growing region on back of rising healthcare spending, increasing focus on cost effective treatments and patent expiries of blockbuster drugs in countries like China and India.
