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Generic drugs are interchangeable biopharmaceutical products, which are similar to branded drugs in dosage form, safety, strength, route of administration, quality and efficacy. Generic drugs serve as affordable alternatives to expensive branded drugs without compromising on their quality. They contain the same active ingredients as their branded counterparts but are not identical in appearance due to different inactive ingredients or colorings. Growing awareness regarding cost-savings of generic drugs and rising penetration of telemedicine services amidst the pandemic are propelling the demand for affordable medicines across the globe.
The global generic drugs market has evolved significantly over the past few years with the entry of various generic versions of blockbuster drugs going off-patent. Generic drugs help lower the cost of healthcare and increase access to critical medications. According to estimates, around 84% of all dispensed prescription drugs in the U.S. are sold as generic versions. Telemedicine has emerged as an effective medium to connect patients with physicians while ensuring social distancing. The upsurge in virtual medical consultations across remote areas has boosted the popularity of low-cost generic drugs.
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 2024-2030, as highlighted in a new report published by Coherent Market Insights.
Market Key Trends:
Patent expiries of blockbuster drugs and rising number of FDA approvals is likely to boost the demand for generic drugs during the forecast period. For instance, between 2017-2021, patents for drugs such as Lyrica, Lexapro, Copaxone and Namenda expired, opening opportunities for generic formulations. Further, collaborations between generic drug makers and e-pharmacies will help improve accessibility of affordable medicines. The entry of latest drug delivery technologies including transdermal patches, complex injectables will support generic drugs uptake. However, complex approval pathways and regulatory issues still challenge the biosimilars sector. Meanwhile, the COVID-19 pandemic has underlined the importance of accessible primary care through telehealth, benefitting the generic drugs industry. Overall, increasing penetration of telemedicine and affordability concerns will continue driving the generic drugs market.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the generic drugs market is moderate. Generic manufacturers need regulatory approval and significant capital investments to build manufacturing facilities. However, the potential for high profits attracts new companies.
Bargaining power of buyers: The bargaining power of buyers is high. Large pharmacy benefit managers and health insurance companies negotiate lower prices from generic drug manufacturers. This puts pressure on prices.
Bargaining power of suppliers: The bargaining power of suppliers is low. Major suppliers of raw materials include active pharmaceutical ingredients suppliers. Generic drug makers can switch to alternative suppliers if needed.
Threat of new substitutes: The threat of new substitutes is moderate. Brand-name drugs losing patent protection are major substitutes. However, it takes time for new innovative drugs to replace existing ones.
Competitive rivalry: Competition in the generic drugs market is high due to the large number of manufacturers. Companies compete based on pricing and ability to quickly launch generics of drugs losing exclusivity.
Key Takeaways
The global generic drugs market is expected to witness high growth over the forecast period driven by increasing demand and healthcare cost savings. 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 2024-2030.
Regional analysis: North America is currently the largest generic drugs market owing to rising healthcare expenditures and rapid uptake of low-cost generics. However, Asia Pacific is expected to grow at the fastest pace during the forecast period due to growing healthcare access in emerging countries and increasing focus of players in the region.
Key players: 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. Companies are adopting competitive pricing strategies and focusing on rapid development of generic versions of blockbuster drugs to gain market share.
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- Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
