NEW YORK, Sept. 7 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:
The Future of the Generics Industry: Opportunities, threats and key trends
Driven by rising demand, patent expiries and pharmaceutical cost-containment policies, generic sales have risen consistently at rates in excess of the pharmaceutical industry average over the past decade. Coupled with changes in the geographic and therapeutic make-up of the sector, this has triggered a period of rapid restructuring within the generics industry. Teva and Sandoz have consolidated their positions at the head of the generic company sales rankings; national and regional businesses have emerged as major forces in emerging generic markets; while new players – including multinationals – have begun to pursue footholds in the generics sector.
Demand for generics will continue to increase rapidly during the next five years. Major patent expiries will present generic manufacturers with substantial new targets – including the world's best-selling pharmaceutical brand, Lipitor. Sales of branded copies will rise at double-digit rates in many developing countries, while unbranded, bioequivalent follow-on products will be prescribed, dispensed and consumed more widely in some of the world's biggest markets. Governments and third-party payers will adopt more robust pro-generic policies in a bid to limit pharmaceutical spending. These will include measures designed to encourage the use of biosimilars, which will help to rein in costs associated with the reimbursement of expensive biotech drugs.
While demand for generics will remain strong, pressure on prices in the sector will intensify as competition heats up, and as payers step up their efforts to limit reimbursement spending. Generic manufacturers will also have to overcome barriers to market entry posed by intellectual property laws, regulatory frameworks and defensive strategies employed by originator companies. Levels of brand affinity that persist among physicians, pharmacists and patients will also act as a constraint on rates at which generics are prescribed, dispensed and consumed.
With volume-based growth set to outweigh constraints on price, the generics market will continue to increase rapidly in value during the next five years. The operating environment in the sector will become increasingly difficult for many small and mid-sized players, however. Problems faced by these companies, the expansion of established market leaders and the entry of more new players will combine to drive further significant restructuring in the generics sector.
Key Features of this report
- Analysis of the size, structure and recent growth of the global generics market, and of the industry it supports.
- Case studies focusing on individual generic businesses and key generic markets.
- Identification and detailed discussion of key generic industry drivers and constraints.
- Appraisal of the impact individual drivers and constraints will have on the market to 2015.
- Forecasts outlining the anticipated size and structure of the generics market in 2015, assessing future prospects for individual generic businesses and identifying potential major new entrants in the sector.
Key Benefits of this report
- Quantify the size and structure of current opportunities in the generics market and the positions held by key players in the sector.
- Identify the main factors acting as drivers and constraints on generic market growth, and gauge their likely impact on the structure of the industry.
- Assess the timing and extent of new opportunities that patent expiries will present for generic manufacturers during the next five years.
- Track the development of pro-generic healthcare policies implemented in key markets, and their likely impact on the industry.
- Understand the strategies being employed by originator companies to block or delay the arrival of generic competition, and how future regulatory intervention might affect their ability to defend patent-expired brands.
- Learn how Teva and Sandoz intend to build on their leadership positions in the generics industry; why second-tier generic businesses are so exposed as acquisition targets; and which pharmaceutical majors are most likely to emerge as major players in the generics sector.
Key findings of this report
Having risen at or close to double-digit rates for the best part of a decade, global sales of generics are now worth some US$140bn – equivalent to approximately 17% of total pharmaceutical market value. With patents on brands that generate combined annual revenues of US$200bn set to expire by 2015, further rapid growth of the generics market is assured.
While the generic industry remains fragmented overall, growing shares of the market have been concentrated in the hands of leading players. Between them, the world's five biggest generic businesses have spent approximately US$50bn on acquisitions since 2001, with Teva alone committing US$24bn to M&A deals in that period. Teva's existing business generates around US$3.5bn in net cash per annum, and will provide the funds required to support further M&A-fuelled expansion.
Regulators have been slow to establish explicit pathways for the approval of biosimilars, while approval routes for small-molecule generics are struggling to cope with demand. The backlog of generic submissions faced by regulators in the US has reached 2,000, and median ANDA review times are currently in excess of 26 months.
Originators have perfected the use of intellectual property protection laws and defensive strategies designed to delay the arrival of generic competition. By the time Lipitor faces its first generic competitor in the US, 44% of the brand's lifetime revenues in that market will have been achieved since the date on which Pfizer's basic product patent on atorvastatin was originally due to expire. Pfizer is one of several multinationals expected to pursue more substantial interests in the generics market in the near future. Sanofi-Aventis has been the most aggressive new 'big pharma' entrant to date, however, spending close to US$4bn on acquisitions in the sector since the beginning of 2009.
The global market for generics will be worth in excess of US$250bn by 2015. Teva and Sandoz will have consolidated their leadership positions by then, but several prominent second-tier generic players will have changed hands.
Key questions answered by this report
- Why has the generics market enjoyed such strong growth in recent years, and what are the main factors that will determine its development through the next five years and beyond?
- What makes markets like Japan and Brazil such attractive targets for generic manufacturers, and why have foreign players struggled to make an impact in these countries?
- Which major original brands face patent expiry during the next five years, and when will they lose exclusivity in the all-important US market?
- Why might some supposedly 'pro-generic' healthcare policies pose a potentially significant threat to the sector?
- How are policy-makers attempting to break down opposition to generics among physicians, pharmacists and patients?
- What steps have regulators taken to curb defensive strategies employed by originators, and how might big pharma's ability to delay generic competition be compromised in future?
- How will growth strategies pursued by the two leading players in the global generics industry differ over the next five years?
- Why is Teva's dominant position in the US generics market so assured?
- Which second-tier generic players represent the most vulnerable acquisition targets, and why?
- Which leading pharmaceutical majors are most likely to pursue assets in the generics market, and which segments will they target?
The Future of the Generics Industry: Opportunities,
threats and key trends
Executive Summary 8
The generics industry 8
Generic industry opportunities 9
Generic industry challenges 10
The future of the generics industry 11
Chapter 1 The generics industry 14
Summary 14
Introduction 15
The global market for generics 15
The generics industry 16
Emergence of the generic giants 18
The impact of acquisitions on Teva's recent expansion 20
Growth of regional and national players 22
Case study: Stada's generic growth engine grinds to a halt 24
Multinationals join the generic fray 27
Big pharma generic deals 28
Biosimilars – new players for a new market 33
Early biosimilar acquisitions and alliances 34
New players 35
Chapter 2 Generic industry opportunities 38
Summary 38
Introduction 39
Patent expiries 39
Impact of patent expiries 40
Recent generic targets 41
Amlodipine 41
Simvastatin 43
Future generic targets 44
Generic activity in 2010 45
Atorvastatin 47
Emerging generic markets 48
Developed markets 49
Case study: The Japanese generics market 50
Developing markets 55
Case study: the Brazilian generics market 57
Pro-generic healthcare policies 61
Pricing and reimbursement policies 63
Generic price caps 63
Reference pricing 65
Price approvals and reimbursement listings 68
Prescribing policy 68
Dispensing policy 71
Drug purchasing 72
Regulatory policies 73
Financial assistance for generic manufacturers 74
Biosimilars 75
Early development of the biosimilars market 76
Regulatory pathways 76
Early headway made by biosimilars 79
Biosimilar pricing and reimbursement issues 81
Biosimilar market prospects 82
Biosimilar targets 83
Biosimilar players 85
Chapter 3 Generic industry challenges 88
Summary 88
Introduction 89
Regulatory barriers 89
Patent exclusivity 90
Patent-term extensions 92
Challenging patents 93
Non-patent exclusivity 95
Orphan drug and pediatric exclusivity 96
Quality standards 97
Bioequivalence 98
Good Manufacturing Practice 99
Regulatory pathways 100
Issues surrounding generic approval and market entry 101
Regulatory pathways for biosimilars 104
Cost-containment policies 105
Public sector procurement 105
Tendering procedures 105
Sole supplier and preferred provider agreements 106
Pricing and reimbursement policy 111
Discount-based price cuts 112
Lower generic price ceilings and post-patent price cuts 113
More aggressive approaches to reference pricing 116
Originator strategies 118
Strategic use of intellectual property and regulatory frameworks 120
'Pay for delay' agreements 120
Citizen petitions 122
Patent layering or 'evergreening' 124
Development of original brands or franchises 126
Product hopping 126
Authorized generics 128
Pricing and promotional strategies 129
Pricing tactics 130
Promotional tactics 131
Negative promotional activity 132
Physician, pharmacist and patient attitudes 133
Physicians 134
Shaping physician behavior 135
Pharmacists 136
Shaping pharmacist behavior 138
Patients 139
Shaping patient behavior 140
Chapter 4 The future of the generics
industry 144
Summary 144
Introduction 145
Generic market prospects 146
The 'core' generics market 146
Emerging markets for branded copies 147
The biosimilars market 148
Generic industry prospects 149
Leading players 149
Teva 149
Sandoz 151
Other leading players 152
National players 155
New market entrants 157
The generics industry in 2015 159
Appendix 160
Primary research methodology 160
List of Figures
Figure 1.1: Top-ranked pharma and generic company sales, 2001 and 2009 17
Figure 1.2: Impact of acquisitions on Teva's global generic revenues 22
Figure 1.3: Development of Stada's German generic sales, 2002-2009 25
Figure 2.4: Impact of US patent expiry on Norvasc's revenues, 2006-2009 42
Figure 3.5: Impact of extended exclusivity on Lipitor's US revenues 119
List of Tables
Table 1.1: Top 6 players in the 'core' generics market, 2009 19
Table 1.2: Teva's major generic acquisitions, 2000-2010 21
Table 1.3: Stada's performance in key markets, 2009 26
Table 1.4: Sanofi-Aventis deals targeting the generics sector 31
Table 2.5: Post-patent decline in US sales of Zocor 44
Table 2.6: Major brands facing US patent expiry, 2010-2014 45
Table 2.7: Generic shares of major developed markets, 2009 50
Table 2.8: Leading Japanese generic company financials, 2009 53
Table 2.9: Generic shares of the Brazilian market, 2004-2009 59
Table 2.10: Generic price caps in major pharmaceutical markets 64
Table 2.11: Reference pricing in major pharmaceutical markets 67
Table 2.12: EU biosimilar approvals 77
Table 2.13: Revenues and patent expiry dates for leading biotech brands 84
Table 3.14: Patent-term extensions granted to major brands in the US 93
Table 3.15: The US generic approval backlog, 2005-2009 102
Table 3.16: Comparison of prices in New Zealand with three other markets 107
Table 3.17: Impact of preferred supplier policy on Dutch generic prices 109
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Generic Drug Industry: The Future of the Generics Industry: Opportunities, threats and key trends
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