New Developments with Operational Updates in Generic Drugs Market
Generic
drugs market growth is buoyed by increasing number of patented
expiries for drugs each year. According to the IMS data
small-molecule products worth US$ 121 Bn are expected to lose patents
in developed markets, such as U.S and Europe between 2014 and 2018.
The IMS also forecasts that biologic products valued at US$ 48 Bn are
expected to lose patent protection over the next three years i.e from
2017 and 2020, which is expected to drive growth of the generic drugs
market. Global generics market is highly competitive with many Asia
Pacific companies entering the developed markets such as the U.S.,
Germany, France, and UK. Recent past has witnessed spurt in mergers
and acquisitions between generic drug manufacturers, with major
players focusing on enhancing their product portfolio through such
inorganic strategies. For instance, Teva Pharmaceutical Industries
Pvt. Ltd., Pfizer, Inc., Mylan, Sun Pharmaceutical, and Fresenius
Kabi entered into acquisitions to increase their revenue share in the
generic drugs market.
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Teva
Pharmaceuticals Industries strengthened its position in the generic
drugs market through acquisition of the generic segment of Allergan,
plc for US$ 40.5 billion in August 2016. This resulted in significant
growth in revenue contribution of its generic drug segment, pegged at
US$ 9.5 billion in 2016.
Mylan
ranks second in the list of generic drug manufacturers, and this is
due to the acquisition valued at US$ 7.2 Bn of Sweden’s Meda by
Mylan, in year 2016. This also aided Mylan to increase its sales of
over-the-counter drugs and expand its presence in new emerging
markets such as China, Southeast Asia, Russia, and the Middle East.
Sandoz—Novartis
Group’s business segment dealing in generic medicines—reported
rampant growth of 9% Y-o-Y in 2016, in sales volume, with revenue
pegged at US$ 9 Bn. However, it was partially offset by a 6% erosion
in price. Pfizer is at the fourth position (US$ 4.6 Bn revenue in
2016). Pfizer acquired Hospira in 2015, in order to increase its
product portfolio of both generic and branded products. Pfizer offers
over 220 injectable medications, plus other off-brand products, which
is expected to aid in gaining high revenue in near future. Patent
loss of Viagra in 2017, will lead to significant generic competition
from Teva and Mylan.
Fresunius
Kabi, a generic arm of the Fresenius German Healthcare Group,
reported a 4% growth in revenue from the U.S. in 2016 driven by
strong sales of sterile injectable drugs. In 2017, the company
entered into agreement to buy Akorn—a generic drugs
manufacturer—for US$ 4.5 Bn, further strengthening its position in
the market. For Endo Pharmaceuticals, till 2014, the generic segment
did not generate significant revenue. However, following its
acquisition of Par Pharmaceutical in 2015, revenue of Endo
Pharmaceutical increased by 12.2% from 2012-2014. Following the
acquisition, Endo enhanced its product portfolio with the addition of
around 100 products, which also included profitable generic products.
Increase
in number of competitor’s for generic drugs market put the pressure
on manufacturers of pricing. Moreover, price celling actions by
respective governments is further aggravating the profit margins of
generic drug manufacturers. Considering the challenges of pricing
pressure as generics outfits feel the pinch with thin margins, the
market is expected to exhibit steady growth in the future.
Being
a very lucrative market with a number of patent expires in the near
future, it is essential for competitive analysis for market players.
This could aid one in devising a unique strategy and process to
sustain in this highly competitive generic drugs market.
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Drugs Market
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