Cost Cutting in Healthcare Expanding Markets for Generic and Biogeneric Products.

PALO ALTO, Calif. -- The market for generic and biogeneric drugs is poised for rapid growth due to patent expirations for many blockbuster products leading to their mass genericization. There has also been a conscious move in developed societies to increase the use of generic and biogeneric products for containing healthcare expenses.

New analysis from Frost & Sullivan (http://www.pharma.frost.com), World Generics and Biogenerics Markets, reveals that the global generics and biogenerics markets revenue totaled $35.4 billion in 2003 and is projected to reach $71.9 billion in 2010.

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In the United States, health plan providers are offering incentives for plan members to use generic medicines to restrain expenditure on healthcare. The nationalized health care system in Europe is also taking similar steps to control drug spending. As a result, generics and biogeneric drugs are emerging as strong contenders to branded medications in virtually all-global pharmaceuticals and biotechnology markets.

With over two dozen patent expirations expected during the forecast period in the United States, sale of generics and biogenerics is expected to grow rapidly until 2010 with the aid of regulatory reforms to increase the rate of growth of the generic and biogeneric drugs industry. On the other hand, in Asia and the rest-of-world (ROW) regions, generic drug manufacturers - aided by weak patent laws - have already introduced generic imitations of drugs still under patent protection.

"The new World Trade Organization (WTO) ruling allows export of medicines that address conditions deemed as national health crises in developing countries," says Frost & Sullivan's Senior Analyst Dhiraj Ajmani. "As a result, large new markets are created for generics producers, ensuing strong double-digit growth for the market leaders."

To leverage such tremendous market prospects, participants - particularly in the United States and Europe - have to overcome the challenge of increase in switch activity for blockbusters that are likely to cannibalize sales of generic and biogeneric products by eliminating the need for a prescribed generic product.

Though Rx-to-over the counter (OTC), switches are limited in Europe and United States, there may be a change in trend due to several significant switches of blockbusters taking place. Recent examples for such 'switches' include Schering-Plough's non-sedating antihistamine, Claritin, and AstraZeneca's ulcer drug, Prilosec in USA and Merck's cholesterol reducer, Zocor, in the United Kingdom.

The Food and Drug Administration (FDA) statement that if the original drug manufacturers resist, it has the power to force such a switch further encourages this switching trend.

Additionally, participants in the biogeneric and generic drug market in developed countries must overcome the challenges arising from ambiguous regulations and complicated patent processes.

"Uncertainties about patent infringements and regulatory processes form a major setback for market participants," says Ajmani. "Currently, regulations pertaining to introduction of generics apply only to small molecule drugs while the regulatory process for large molecule, protein-based biotech products is yet to be defined."

Market participants are also likely to have to tackle the mindset of some of the end users in developed societies who believe that branded products are more effective than unbranded ones. Even if compelled to change drugs, they shift from one brand to another, despite the availability of low-cost generics.

The Worldwide Market for Generic and Biogeneric Products, a part of the Pharmaceutical and Biotechnology subscription, analyzes the world market for generic and biogeneric products. It focuses on the United States, European, Asian, and ROW markets. The research provides a comprehensive snapshot of the competitive landscape with revenue and prescription forecasts. Industry challenges are outlined with information on market and technology trends to help participants capitalize on opportunities for growth. Analyst interviews are available to the press.

Frost & Sullivan, a global growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence, and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers, and support staff spans the globe with offices in every major country.

World Generics and Biogenerics Markets

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Keywords in this release: generic products, patent, global, pharmaceuticals, biogenerics, research, information, market, trends, technology, forecast, World Trade Organization, switch, Rx, Over The Counter (OTC), health plan providers, nationalized health care system, Food and Drug Administration, FDA, branded products