February 16, 2025

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

 

Generic drugs are bioequivalent pharmaceutical drugs that are developed and manufactured to be equivalent to an original patented drug in dosage form, strength, route of administration, quality and efficacy. Generic drugs enhance access to healthcare by driving down drug prices, providing more treatment options and ensuring that critical drugs remain available across the globe. With rising healthcare costs, generic drugs have become an increasingly important part of pharmaceutical care as they reduce overall prescription drug costs for patients and healthcare payers by 60-80% compared to their brand-name equivalents. Generic medicines meet the same quality standards as their brand-name counterparts with respect to strength, purity, and stability

The global 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 key trends:
Loss of exclusivity: As patents of branded drugs expire, generic versions are introduced in the market, increasing affordable healthcare options for patients. Notable patent expiries in the coming years include Lyrica, Humira and Revlimid, creating a huge opportunity for generic drugs.

Increasing healthcare expenditure: Rising income levels and an aging population are fueling greater spending on healthcare globally. Generic drugs play a crucial role in containing costs and expanding access to treatment. Governments across regions are promoting the use of generics through incentives and policies.

Technology advancements: Continuous R&D is lowering development and manufacturing costs of generic drugs compared to branded versions. Advanced drug delivery technologies are also expanding the genericizable market. Approvals of generic complex drugs like biosimilars pose a major future growth driver.

Awareness campaigns: Initiatives by healthcare providers and regulatory bodies in countries to educate patients and physicians about generic substitution are boosting the preference and market potential of affordable generic alternatives.
Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate due to high capital requirements for R&D, manufacturing, and regulatory approvals. However, opportunities exist for specialty drugs.

Bargaining power of buyers: The bargaining power of buyers like wholesale distributors, pharmacy benefit managers and hospitals is high as they can negotiate pricing and switch to generic drug alternatives if original brands become too expensive.

Bargaining power of suppliers: The bargaining power of suppliers of active pharmaceutical ingredients and contract manufacturing organizations is moderate since they face some dependence on large generic players for orders.

Threat of new substitutes: The threat of new substitutes is high due to possibility of biosimilars eating into the market share of some biologics going off-patent. Generics of popular drugs also intensify competition.

Competitive rivalry: Intense due to rising competition from both domestic and international vendors trying to maximize profits in a price-sensitive market through product differentiation and value-added services.

Key Takeaways

The global Generic Drugs Market is expected to witness high growth, exhibiting CAGR of 5.4% over the forecast period 2023 to 2030, due to increasing healthcare spending and patent expiries of blockbuster drugs. The market size for 2023 is estimated to be USD 439.37 bn.

Regional analysis: North America currently dominates the generic drugs market owing to favorable regulations and a strong focus on healthcare cost reduction in the US. Asia Pacific is expected to witness the fastest growth over the forecast period with China and India emerging as major generic drug markets.

Key players: Key players operating in the generic drugs market includes 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. These companies aim to strengthen their market position through new product launches.
*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it
Ravina
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Ravina Pandya, a content writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemicals and materials, etc. With an MBA in E-commerce, she has expertise in SEO-optimized content that resonates with industry professionals. 

Ravina Pandya

Ravina Pandya, a content writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemicals and materials, etc. With an MBA in E-commerce, she has expertise in SEO-optimized content that resonates with industry professionals. 

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