GHP September 2016

60 | ghp September 2016 Translation & Commercialisation High-Value Specialty Medicine, Biosimilars and Premium Pricing Portfolio Drive Growth in the Global Generic Pharmaceuticals Market On the flip side, increasing global competition, downward pricing pressure, and tightening regulations will challenge market participants. Further, profes- sionals and patients often prefer branded drugs over generics. Using innovative production platforms to develop lower cost biosimilars as well as a premium priced portfolio can offer greater mileage to generics companies. Recent analysis from Frost & Sullivan, Global Generic Pharmaceuticals Market, finds that generic drugs earned revenues of $330.87 billion in 2015, with a 37% share of the global pharmaceutical market. This is expected to reach $557.37 billion by the end of 2020. In fact, the generics segment is growing at a compound annual growth rate of 11% for this period, while the global pharmaceutical market is growing at a lower CAGR of 9.8%. By 2020, speciality and biosimi- lars will account for up to 70 % share of generics. “Patent expiration and increased usage of traditional generic drugs are curbing the cost of drugs, com- pelling the industry to invest in specialty medicines,” said Frost & Sullivan Transformational Health Industry Manager Sanjeev Kumar. “With innovation and tech- nology, generics can be enhanced to deliver additional benefits. Furthermore, to beat the competition, several generics companies in developed countries are trans- forming themselves from low-margin formulation to high-margin formulation manufacturers.” The US remains the largest generic pharmaceuti- cals market, characterised by high profit margins, high levels of generic prescription by doctors, strong intellectual property legislations, retailers’ purchasing price, and pricing levels determined by demand. Europe may emerge as a game changer with the early adoption of biosimilar drugs. “The next big opportunity, however, lies in emerging markets,” noted Kumar. “The availability of cheap labour, inexpensive production methods, skilled personnel, and sound infrastructure make India and China the most sought after destinations for import of generics by developed markets.” While the economic boom and healthcare reforms make China lucrative, India is a major market for con- sumption as well as manufacturing of generics. The country targets exports of more than 40 % to the US each year. Dominated by branded generics, the Indian market will see higher demand after the implementa- tion of universal health coverage. Web Address: www.frost.com Emerging markets are the next big opportunity after the US, says Frost & Sullivan. Increased life expectancy, a growing aged pop- ulation cohort, and the higher incidence of chronic lifestyle-relat- ed diseases are encouraging the use generic pharmaceuticals as governments and healthcare service providers strive to contain costs. Impending patent expiries of key drugs and a promising pipeline of next-gen high value-added biosimilars too will sustain double digit growth for generics.