The global generics market has experienced dynamic growth in recent years, registering a compound annual growth rate (CAGR) of 11.1% between 2012 and 2016 to reach a value of $318 billion, according to data from research company MarketLine.
The company’s latest report states that Asia-Pacific was comfortably the largest region in value terms, accounting for more than 46% of the global total in 2016. The US followed with more than 31%, while Europe continued to lag behind, contributing only 15.6%.
The US once again reigned supreme as the single biggest country market, with a value of $99.7 billion, and despite being more mature than all other markets, the country still offers excellent growth opportunities.
Nicholas Wyatt, MarketLine Project Leader, explains: “Although the US market is the most mature globally, it remains some way off saturation point. In recent years, significant savings have been made by substituting branded drugs with generics, an estimated $227 billion in 2015. It is therefore not difficult to see the appeal, particularly at a time when people fear possible changes to Medicare will increase costs.”
This is reflected in MarketLine’s forecast data for the US market, which the company predicts will grow with a CAGR of 7.2% between 2016 and 2021, to reach a value of $141.2 billion.
Things are less positive in Europe, which, despite lagging way behind the US, is expected to see slower growth.
Wyatt continues: “Generic medicines save EU patients and the healthcare system more than €40 billion ($53 billion) each year. Despite this, in markets such as France, Italy and Norway, generics still account for less than half of the pharmaceuticals market as a whole, owing to an enduring resistance to prescribing generics. Even in the UK, where generics account for an estimated 82% of prescriptions, proposals for automatic substitution have not been ratified.”
The UK is not alone in this regard, and branded drugs are proving hard to displace in Europe. Consequently, MarketLine is projecting a CAGR of 5.6% for the 2016–2021 period, driving the market to a value of $65.1 billion in 2021.
Wyatt concludes: “Despite having more scope for growth than the US, Europe will fall further behind. However, that does not mean the excellent growth potential should be overlooked.”
“As governments struggle to maintain healthcare spending, reimbursement made using the manufacturer’s list price for the branded product starts to look very unattractive. This should propel a move toward greater generic substitution.”