February 24, 2024

Increasing healthcare expenditure to stimulate growth of the global generic drugs market

 

Generic drugs contain the same active ingredients and are equivalent to their branded counterparts in dosage form, strength, route of administration, quality and efficacy. They are increasingly used as an alternative to treat various chronic and acute conditions in a cost effective manner. The market comprises products like tablets, capsules, injectables and others used for therapeutic areas including cardiovascular, anti-infective, neurological disorders and diabetes.

The 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:
Increasing healthcare costs have prompted government bodies across countries to support and promote generic versions of drugs. This has led to significant price reductions of off-patent drugs. Further, Patent expiration of many blockbuster drugs has opened opportunities for generic manufacturers to introduce biosimilar versions. For instance, the patent expiry of biologics like Humira, Revlimid and others between 2023-2025 is anticipated to boost generic drug production. Additionally, high incidence and economic burden of chronic diseases like cancer, diabetes etc. has augmented the demand for low-cost generic medications for long-term treatment and management. Various initiatives aimed at enhancing access to affordable medicines complement market growth. However, complexities involved in the development of generic biosimilars and rising price pressure on manufacturers may impede the marketexpansion to some extent.

Segment Analysis
The global generic drugs market is segmented on the basis of dosage form into oral, topical, injectables and others. Among these, the oral segment dominates the market and accounts for the largest revenue share. This is because oral drugs are convenient to administer and provide better patient compliance as compared to other dosage forms such as injectables. Oral generic drugs also have lower production costs as compared to other dosage forms.

PEST Analysis
Political: The governments across various countries are focusing on reducing healthcare costs by promoting use of generic drugs. They offer cost savings of 40-70% over branded drugs. This is positively impacting the market growth.
Economic: The global generic drugs market is expected to grow at a significant pace due to rising healthcare expenditure worldwide coupled with increasing prevalence of chronic diseases. Growing geriatric population which is more prone to illnesses also contributes to market growth.
Social: Changing lifestyles and dietary patterns have led to a rise in lifestyle diseases. This has increased the demand for pharmaceutical drugs for treatment as well as management of diseases. Increasing awareness about cost-effective generic drugs is also fueling the market expansion.
Technological: Continuous R&D efforts and advanced manufacturing techniques adopted by generic drug players have helped address issues related to bioequivalence and quality. This has improved product differentiation and competitive advantage.

Key Takeaways
– The global generic drugs market size was valued at USD 439.37 billion in 2023 and is expected to reach over USD 658 billion by 2030, exhibiting a CAGR of 5.4% during the forecast period. Growth of the market can be attributed to rising need for cost-effective treatment options and increasing prevalence of chronic diseases.

– Regionally, North America dominates the global generic drugs market and is anticipated to continue leading over the projected timeframe. This is owing to rising healthcare costs in the region prompting greater adoption of low-cost generic medicines. The presence of key players as well as advancement in manufacturing facilities also support market growth in North America.

– 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. Strategic collaborations, new product launches and strengthening of manufacturing infrastructure have been key growth strategies adopted by these players.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it