Briefing based on the key findings of my research on the Global Generic Pharmaceuticals Market 2010, covering the developed markets like the U.S, Germany, UK, France, Italy and Spain as well as the emerging markets such as India and China.
Global generic pharmaceuticals market – brighter times ahead
1. Global Generic Pharmaceuticals Market –
Brighter Times Ahead
Analyzing the Global Business Prospects for Generic Drug
Manufacturers in the Developed and Emerging Markets
Aiswariya Chidambaram, Research Analyst
Healthcare
9.2.2012
2. Aiswariya Chidambaram
Functional Expertise
Particular expertise in:
- Analyzing regional sales performance, identifying performance gaps and providing relevant solutions to
stakeholders for the growth and development of regional business.
- Designing and roll out of appropriate training modules, conducting workshops on selling skills excellence and
working on development of Business executives at professional and personal levels.
- Conducting induction training to new recruits and field coaching on marketing projects to ensure smooth
implementation.
- Recruiting candidates and identifying talents at regional level by appropriate means of performance analysis and
competency mapping. Special projects implementation on a regional scale
Industry Expertise
Expertise in diverse therapeutic segments and product portfolios which include
- Diabetology – Oral Anti Diabetics
- Cardiovascular Diseases – Anti-hypertensives.
Aiswariya - General Medicine – Antibiotics, Anti-fungals, and Health supplements.
Chidambaram - Women’s Healthcare – Oral Contraceptives
What I bring to the Team
Research Analyst, In depth knowledge of four specific Therapeutic segments.
Expertise in tracking Industry trends and events as part of Market Vigilance.
Healthcare Practice, Reasoning based recommendation for improved efficiency.
Frost & Sullivan Excellent communication and presentation skills.
Global, Career Highlights
Chennai, Have successfully completed a NIH project on Filariasis at the Tuberculosis Research Centre (Chennai).
India Completed internship projects on Industrial Microbiology, Cytogenetics and Karyotyping, and a course on “Tools in
Bio-informatics and Vector Designing.”
Worked as a Performance Consultant for South India (covering four states – Tamil Nadu, Andhra Pradesh, Kerala and
Karnataka) with a leading Multinational firm, Bayer Healthcare.
Worked on market research projects such as the “Global Generics Pharmaceutical Market”, “European Pharmaceutical
and Biotech Contract Manufacturing Markets” and so on with Frost & Sullivan.
Education
Bachelors in Technology, specialization in Biotechnology, from Anna University, Chennai, India.
3. Focus Points
Generics Lead the Way Ahead
Key Therapeutic Areas Overview
Key Therapeutic Areas – Growth Analysis
Key Patent Expiries Between 2010 and 2017
Global Hot Spots – Generic Pharmaceuticals Market
Key Market Drivers and Restraints Summary
Focus Points Mergers and Acquisitions Outlook
Key Mergers and Acquisitions in 2010
Competitive Landscape Analysis
Future Trends and Directions
Strategic Recommendations for Success
Conclusions and Implications
4. Generics Lead the Way Ahead
The global generic pharmaceuticals market was
valued at $123.85 billion in 2010, growing at 11.0%
Blockbuster
drugs worth $150
U.S is the world’s largest billion are set to
generics market constituting lose patent
45%. Emerging markets such protection
as Brazil, Russia, India, between 2010 and
China, Turkey and 2017
South Korea present
growth opportunities of
15 % to 20% while
India and China are huge generic matured markets are
markets in terms of production likely to grow between 6
The top eight global
volume. markets – the United
% to 10 % over the next
States, Germany,
five years France, the United
Kingdom, Canada,
Italy, Spain and
Japan – account for
80% of the total
generic sales
The top ten global generic companies constitute a share of 47% of
the total generics market.
Source: Frost and Sullivan
5. Key Therapeutic Areas Overview
Generic Pharmaceuticals Market: Percent Revenue Contribution of Therapeutic Segments (Global),
2010
Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan
Others include Gastro-intestinal, HIV, Immunology and so on.
Cardiovascular and CNS are the two largest market segments, constituting nearly 38 per cent of the global
generic pharmaceuticals market together.
However, therapeutic segments such as Respiratory, CNS and Oncology are likely to witness significantly high
growth rates, attracting the attention of market participants.
On the contrary, segments such as Diabetes and Genitourinary/ hormonal drugs are expected to decline by the
2017.
6. Key Therapeutic Areas – Growth Analysis
20% The patent expiry of several key
antipsychotics and anti-depressants The reason behind such
contribute to the rapid growth of CNS enormous growth is the
drugs market between 2010 and 2017. massive number of
14% patent expiries. Almost
Development/ half of the global asthma
Fast Growing and COPD market drugs
are set to lose patent
12% protection by 2016. Relatively lesser
number of drugs are
subjected to generic
Fast exposure during the
10% Growing forecast period and
C
Development/ hence the decline in
A growth.
Fast Growing
G 8% Fast
R Growing Growing Growing
One of the promising
6% segments for generic Declining Declining Stable
participants to venture
Intense competition,
between 2010 and
promotion of branded
2015 is oncology as
4% drugs worth $10 b are
drugs and new
innovative
set to lose patent
formulations such as
protection by 2015
inhalable insulin are all
2% likely to deter the
growth of generics.
Cardiovascular CNS Oncology Rheumatology Respiratory Diabetes Dermatology Genitourinary Others
Bubble size represents market value Source: Frost & Sullivan analysis.
7. Key Patent Expiries Between 2010 and 2016
Expiry in 2010
• Advair/Seretide by GSK Expected expiry in 2012 Expected expiry in 2014
• Aricept by Pfizer, Eisai • Avandia by GSK • Actonel by Warner Chilcott
• Arimidex by Astra Zeneca • Avapro by Sanofi Aventis, BMS • Celebrex by Pfizer
• Cozaar by Merck • Detrusitol by Pfizer, • Copaxone by Teva
• Effexor by Pfizer Pharmacia-Upjohn • Cymbalta by Eli Lilly
• Flomax by Boehringer, Astellas • Diovan by Novartis • Micardis by Boehringer
• Gemzar by Eli Lilly • Evista by Eli Lilly • Nexium by Astra Zeneca
• Hycamptin by GSK, Pfizer, • Lexapro by Forest • Spiriva by Boehringer Ingelheim
Protonix • Seroquel by Astra Zeneca
• Levaquin by J&J • Singulair by Merck
Expected expiry in 2015
• Taxotere by Sanofi Aventis • Symbicort by Astra Zeneca
• Abilify by Otsuka
• Viagra by Pfizer
Expiry in 2011 • Enablex by Novartis
• Viramune by Boehringer
• Actos by Takeda • Neulasta by Amgen
• Zeldox/Geodon by Pfizer
• Alimta by Eli Lilly • Tracleer by Actelion
• Zometa by Novartis
• Atacand by Astra Zeneca
• Femara by Novartis Expected expiry in 2013
• Epogen by Amgen Expected expiry in 2016
• Lipitor by Pfizer
• Pariet by Eisai • Cialis by Eli Lilly
• Oxycontin by Purdue
• Procrit by Amgen • Crestor by Astra Zeneca
• Plavix by BMS, Sanofi Aventis
• Zyprexa by Eli Lilly
Source: Generic Pharmaceutical Association, CPA Global, Frost & Sullivan analysis.
8. Global Hot Spots – Generic Pharmaceuticals Market
Key
Mature
Germany
Size : $8.80 billion
India Emerging
Size:$10.00 billion
Growing
United Kingdom
Size : $5.40 billion
United States Italy
Size:$55.78 billion Size:$1.09 billion China
Size:$26.45 billion
Note
France
India and China are studied as two separate
generic pharmaceuticals market owing to the Size:$4.20 billion
lack of implementation of patent protection
laws up to 2005. Hence, domestic players were
free to produce generic versions of molecules Spain
under patent protection in these markets by Size:$2.20 billion
means of reverse engineering.
Source: Frost & Sullivan analysis.
9. Key Market Drivers and Restraints Summary
Generic Pharmaceuticals Market: Key Drivers and Restraints Summary (Global), 2011-2017
Blockbuster drugs Key Drivers
worth $150 billion
are due to lose
patent protection New provisions
between 2010 and introduced by Changing population
2017 governments to demographics and
encourage lifestyle patterns
generic utilisation
Increasingly
Gaining access to Threat of introduction
stringent
emerging markets of authorised generics
regulations and
and niche therapeutic by branded
price control
segments companies
measures
Parallel trading
and counterfeiting
of generics from
low cost markets
Key Restraints/Challenges Source: Frost & Sullivan analysis
10. Mergers & Acquisitions Outlook
Generic Pharmaceuticals Market: Number of Deals and Amount Spent on Mergers & Acquisitions (Global), 2000 - 2009
The number of deals and the total expenditure on mergers and acquisitions have been increasing steadily over the
years since 2000. There was a peak in M&A activity in 2005 and 2008. The trend is likely to continue with all the key
generic participants increasing their dependence on strategic alliances to conquer market shares.
Source: Frost & Sullivan analysis.
11. Key Mergers & Acquisitions in 2010
Abbott - Abbott – Piramal Teva – Mylan –
Solvay Healthcare Ratiopharm Bioniche Pharma
Value: $3.72 billion
Value: $6.20 billion Key Reason: Value: $5.00 billion Value: $550.0 million
Key Reason: • Abbott, by acquiring the Key Reason: Key Reason:
• This acquisition will entire solutions business • Ratiopharm, the •. Bioniche Pharma has
enable Abbott to attain of a leading company in second largest generic more than 30 products in
leadership in emerging the branded Indian company in Germany the market, 15 ANDAs
markets where there is generic pharmaceuticals and the sixth largest pending for approval at
significant opportunity market such as Piramal worldwide, will position the United States FDA
for branded generics Healthcare, has the Teva as the leading and 25 products in
and in specialty markets rights to gain access to generic pharmaceutical developmental stages.
like cardiovascular, 350 brands and company in Europe, This will help drive both
neuroscience and trademarks. These particularly in Germany top and bottom line
gastroenterology. It is include market- leading as well as in emerging growth for Mylan and
expected to add another brands in multiple markets like Spain, facilitate direct entry into
$2.90 billion to Abbott’s therapeutic areas such Italy, France, and the the North American
2010 sales. as respiratory and Netherlands. injectables market.
antibiotics..
Source : Frost & Sullivan analysis.
12. Competitive Landscape Analysis
Generic Pharmaceuticals Market: Top Five Companies by Market Share (Global), 2010
The top five generic pharmaceutical companies
Rank Company accounted for 39 per cent of the share in the global
generic pharmaceuticals market in 2010.
The top three companies namely Teva, Sandoz
and Mylan registered significant growth rates of
1 16, 14 and 11 per cent respectively in 2010.
Most of the big companies prefer mergers and
2 acquisitions to organic growth as a faster means to
consolidate and expand their market shares.
3 Mylan
4
5
Source: Frost and Sullivan analysis
13. Future Trends and Directions
Balance in terms of healthcare expenditure and sales revenue is likely to shift from developed markets to
emerging markets owing to immense market opportunities and untapped market potentials.
Consolidation is expected to remain the key factor for growth and sustenance of generic
companies. Partnerships, mergers, acquisitions and strategic alliances will help both
branded and generic companies to expand their global footprint and gain market shares.
Large generic companies seek to establish their own R&D entity and hence are
Key Trends likely to increase their investments in R&D activities for long-term growth
and sustenance in the pharmaceutical industry.
Technology
Development of Transgenic technologies
Generic consumption is likely to be favoured in a big way by the government, payers,
Stem cell technologies
Cloning technologies
policy-makers and physicians owing to the huge cost-saving benefits to the patients
and curtail healthcare expenditure.
Generic manufacturers tend to increasingly focus on higher value biological therapies, biosimilars,
controlled release products, sterile formulations and niche therapeutic segments, which are less
competitive yet commercially attractive.
Source: Frost and Sullivan analysis
14. Strategic Recommendations for Success
Strategy is a style of thinking, a conscious and deliberate process, an intensive implementation system, the science
of insuring future success – Pete Johnson
Differentiated Approach Explore New Avenues Instill Competitive Plan Ahead for the Future
Capabilities
Big multinational generic
firms require to focus on Analyze prospects for
Invest in R&D. Research customer
Products with market globalization
needs, preferences,
technologically - Strategic alliances
Improve product line. expectations.
challenging between multinational
formulations. generic firms and
Defend company’s Monitor new
Products which require domestic participants
position in the market. technological
significant regulatory with locally restricted
developments to face
support. operations.
Strike a balance the change.
Products with limited between supply and
availability of APIs. Strengthen distribution.
demand side. Target therapeutic
areas with high levels
Medium-sized generic firms Pioneer new and better of unmet clinical
require to focus on technologies. needs.
Products with relatively
higher profit margins.
Appropriate time of
entry into the right
market.
Source: Frost and Sullivan analysis
15. Conclusions and Implications
The global generic pharmaceuticals market is expected to peak in 2012, owing
to the patent expiry of several leading brands such as Seroquel, Viagra, Lexapro to
name a few.
Regulations favoring generics, wider health insurance coverage by Government
and private bodies, and better co-operation from physicians and pharmacists are
expected to boost generic consumption.
The consolidation wave is likely to rise high in the global generic pharmaceuticals
market.
CNS and Cardiovascular are expected to be the therapeutic areas of interest for
generic drug manufacturers.
However, market participants are likely to face challenges due to increasing
pricing pressure, price-cuts and regulatory barriers.
Source: Frost and Sullivan analysis
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