The generic drugs market provides cost-effective treatment alternatives to expensive branded drugs for various therapeutic areas. Generic drugs contain the same active pharmaceutical ingredients and are equivalent to their branded counterparts in dosage form, safety, strength, route of administration, quality and efficacy. Generic drugs are preferred due to their significantly lower prices compared to branded drugs, which makes treatments more affordable and accessible to a broader population. The global generic drugs market is estimated to be valued at US$ 439.37 bn in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period from 2023 to 2030.
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.
Key opportunities in the generic drugs market include the patent expiries of major drugs such as Lipitor, Seroquel, Nexium and others. This allows other manufacturers to produce low-cost generic versions of these drugs. The U.S. generic drug market is expected to grow significantly owing to the patient-friendly regulations introduced through the Affordable Care Act. Furthermore, the demand for generic drugs is growing globally as they provide 40-70% cost savings compared to their branded counterparts, benefitting both patients and healthcare systems.
The global expansion of the generic drugs market will be driven by patent expiries in developed countries and growing demand in developing nations. Asia Pacific and Latin America are expected to increase their share in the global market due to rising income levels and increased healthcare access and insurance coverage in these regions. India and China are rapidly becoming global generic drug manufacturing hubs due to their large active pharmaceutical ingredients manufacturing base and low production costs.
Market Drivers: A key market driver is the patent expiry of many blockbuster drugs over the forecast period. Drugs facing near-term patent expiries such as Advair, Eliquis and Revlimid are expected to lose their exclusivity between 2023-2025 and will drive generic drug market growth. As per industry estimates, sales of these drugs total over US$ 25 billion. Generic drug manufacturers are already gearing up to produce low-cost versions, resulting in significant cost savings for patients and the overall healthcare sector.
PEST Analysis
Political: The regulation imposed by governments of various countries on the generic drugs sector influences its growth. Stringent regulations on patent protection and compulsory licensing have made many countries adopt generic versions early.
Economic: Affordability of generic drugs compared to branded drugs enhances their demand especially in developing nations where a majority of the population has low income. Generic drugs help save healthcare budgets.
Social: With rising healthcare costs, popularity of generic drugs is increasing as people prefer affordable treatment options. Growing health awareness drives adoption of medications for chronic diseases managed through generics.
Technological: Advances in drug delivery systems, analysing efficacy of generics during clinical trials through lab testing help introduce improved generic versions. Advanced manufacturing techniques aid mass production.
Geographical regions with high market concentration
The generic drugs market in terms of value is highly concentrated in regions like North America, Europe, and Asia Pacific owing to a large patient population seeking affordable treatment. The US and major European countries together account for more than half the global generics market value due to their sizeable healthcare spending and acceptance of generics.
Fastest growing geographical region
Asia Pacific region is poised to witness the fastest growth for the generic drugs market during the forecast period. This is attributed to the expanding patient base, rising healthcare expenditure, bulk of the world's population residing here along with growing medical infrastructure and increasing focus of leading generic drugmakers on emerging Asian countries.
