The generic drugs market has witnessed significant growth over the past few years owing to the cost benefits offered over branded drugs. Generic drugs contain the same active pharmaceutical ingredients as their branded counterparts but are not protected by patents, allowing other companies to produce copies once the original patent expires. This significantly reduces the overall cost of medication and improves patient access to affordable treatment options. As per estimates, generic drugs are 50-80% less expensive compared to their branded equivalents. With rising healthcare costs placing a substantial economic burden globally, generic drugs provide an effective solution to lower treatment costs without compromising on quality and efficacy.
The Global Generic Drugs Market is estimated to be valued at US$ 439.37 bn in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030.
Key Takeaways
Key players operating in the generic drugs market are 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. These players are focusing on expanding their generic drug portfolio and global footprint through collaborations and acquisitions. For instance, in 2023, Mylan N.V. acquired the global branded and generic off-patent anti-infectives business of Pfizer Inc., immediately creating a Global Top 5 company by revenues.
The demand for generic drugs is witnessing robust growth across both developed and developing nations due to their significantly lower costs in comparison to branded drugs. As per a WHO study, over 80% of the world's population now have access to generics through nearly 100 generic companies. This rise in access and affordability of medicines is expected to support market expansion over the coming years.
Advances in pharmaceutical manufacturing technologies have enabled companies to develop complex generic versions of drugs which were earlier deemed difficult to replicate as generics. This has helped widen the scope of the generics industry beyond simple drugs to biologics, inhaled products and other specialty drugs. Innovations in drug delivery systems are also allowing for generic replacements of blockbuster drugs sooner than earlier expected.
Market Trends
Increasing number of patent expiries: A steady stream of blockbuster drug patents set to expire over the next decade is likely to increase the availability of their generic equivalents. This will translate to greater affordability and enhanced accessibility of a variety of drugs through generics.
Approvals for biosimilars: Regulatory approvals for biosimilar versions of blockbuster biologic drugs will encourage biomanufacturers to enter the market. This will intensify competition and potentially lead to substantial cost reductions for biologics as well.
Market Opportunities
Emerging markets: Rapid economic expansion of developing Asian, Latin American, Middle Eastern and African countries along with rising incomes will drive significant growth opportunities for low-cost generic drugs to cater to these populations.
Complex generics: Advancements allowing production of complex generics, including inhaled therapies, biologics and targeted drugs open avenues for market players to replicate high-value drug varieties, expanding the addressable generics market multi-fold.
Impact of Covid-19 on Generic Drugs Market Growth
The Covid-19 pandemic has significantly impacted the generic drugs market in both positive as well as negative ways. On the positive side, the demand for generic medicines saw a spike as people stocked up on essential medicines and therapeutics to deal with Covid symptoms. Many generic alternatives were actively used to treat Covid symptoms as well as comorbidities in patients. However, supply chain disruptions led to shortages of raw materials and active pharmaceutical ingredients (APIs) which adversely affected manufacturing operations. This led to increased prices and shortage of supplies.
The US and Europe remain top revenue generators for generic drugs market given the large population covered under public and private insurance programs which prefer low-cost generic alternatives. However, the pandemic has accelerated the demand shift towards developing regions in Asia Pacific and Latin America. The pandemic exposed the lack of healthcare access in these regions prompting governments to invest more in public programs and push for generic drugs uptake to improve affordability and access to essential medicines.
Post pandemic, companies will need to diversify their API sourcing from multiple geographies to avoid supply chain disruptions. Improving digital technologies for inventory management and demand forecasting across complex global supply chains will also be crucial. Governments globally are expected to increase policy support for the generic drugs sector to address medicine shortages and bolster self-sufficiency in drug manufacturing.
Geographical Regions with High Concentration in Generic Drugs Market
The US market accounts for the largest share of the global generic drugs market in terms of value due to the presence of a well-established generic drugs industry and the ability of consumers to afford low-cost generic alternatives through private and public insurance. In 2024, the US market is projected to exceed $150 billion driven by rising healthcare demand from aging population and policy support for generics uptake in public programs like Medicaid.
The Indian generic drugs market has emerged as the fastest growing globally based on increasing domestic consumption as well as rising exports. India supplies over 50% of global exports volume of generic drugs owing to its large manufacturing capabilities and low-cost production. With more partnerships between Indian and international firms, the Indian market is forecast to witness over 10% annual growth through 2030. This will further cement India's position as the 'Pharmacy of the World'.
Priya Pandey is a dynamic and passionate editor with over three years of expertise in content editing and proofreading. Holding a bachelor's degree in biotechnology, Priya has a knack for making the content engaging. Her diverse portfolio includes editing documents across different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. Priya's meticulous attention to detail and commitment to excellence make her an invaluable asset in the world of content creation and refinement.
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