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Generic drugs are bioequivalent copies of branded drugs whose patents have expired. They contain the same active ingredients in the same dosage form and strength as their branded counterparts. Generic drugs are required to meet the same quality and safety standards as their branded counterparts but are available at lower costs. They offer significant cost savings for both patients and the healthcare system as their prices are usually 40% to 80% lower than their branded counterparts. The global generic drugs market offers generics for a wide range of therapeutic categories including central nervous system drugs, cardiovascular drugs, anti-infective drugs, respiratory drugs, and others. The market has also witnessed the approval and launch of generic versions of blockbuster drugs like Lipitor, Plavix, Nexium, and others.
The global generic drugs market is estimated to be valued at US$ 439.37 bn in 2023 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics
Growing Demand for Cost-Effective Drugs (also referred in heading): Population around the world is aging rapidly, and a steadily increasing number of people are suffering from chronic and expensive-to-treat conditions like diabetes, cancer, and cardiovascular diseases. At the same time, healthcare costs are spiraling upwards, putting an unsustainable financial burden on patients as well as national health systems. This has led to a surge in demand for more affordable generic drugs across both developing and developed countries. Lower prices of generic drugs allow wider access to medicines and help save healthcare budgets, thereby driving their uptake. Launch of Generic Versions of Blockbuster Drugs: As patents on several blockbuster drugs expire, generic companies are launching their generic equivalents. For example, the launch of generic equivalents of drugs like Lipitor, Plavix, and Nexium has significantly boosted the generic drugs market.
Segment Analysis
The global generic drugs market is dominated by the solid oral drugs segment. This segment currently holds around 70% market share on account of high demand for oral medication like tablets and capsules for chronic therapies. The oral route is considered safest and most convenient for administering drugs. Moreover, solid oral drugs have higher stability, longer shelf life and require lower manufacturing costs, which make them attractive for generics.
PEST Analysis
Political: Governments across major countries are promoting the usage of generic drugs to provide affordable healthcare to more population. Various initiatives are being taken to accelerate generic approvals and lower regulatory barriers.
Economic: The patents of many blockbuster drugs are expiring leading to intense price competition from generic equivalents. This is driving down medicine costs and improving access and affordability of treatment. Generics on an average are 70% cheaper than their branded counterparts.
Social: With growing chronic disease burden and increasing healthcare costs, populations are demanding more affordable treatment options. Generics help meet this need while freeing up financial resources for other social development programs.
Technological: Technologies like 3D printing and continuous manufacturing are being explored to enable on-demand production of generics and facilitate local or on-site manufacturing. This could help address supply chain issues and better cater to regional/local demand.
Key Takeaways
The global generic drugs market is expected to witness high growth over the forecast period supported by patent expiries of major biopharmaceutical drugs, emphasis on cost-containment in healthcare systems across regions, and initiatives to promote generic utilization. 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 indicates North America currently leads and is expected to maintain its position through 2030 owing to presence of many generic manufacturers and robust regulatory approvals framework. However, Asia Pacific region is poised to depict fastest expansion during the forecast period driven by growing healthcare infrastructure, rising prevalence of chronic diseases, and favourable generic policies of governments.
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 companies are focusing on new product launches, capacity expansion in high growth markets and acquisitions to consolidate their market shares.
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- Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
