World Generics and Biogenerics Markets

Published by: Frost & Sullivan

Published: Sep. 7, 2004

Table of Contents

Abstract

With end users of prescription drugs seeking to pay less for medication, generic and biogeneric products are poised for strong growth, especially in the developing nations. However, this may not be the case in developed regions - especially in the United States and Europe - where market growth is likely to be restricted due to concerns over patent infringements and lack of clear-cut regulatory processes for approval of generic and biogeneric drugs. 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. Even a minor change in the manufacturing process is likely to trigger major changes in biological activity that are distinctly different from original products and this mandates the use of clinical testing of biogeneric drugs prior to their approval.

Frost & Sullivan’s recent study analyzes the worldwide market for generic and biogeneric products. It focuses on the United States, European, Asian, and the Rest-of-the-World (ROW) markets. The research provides a comprehensive snapshot of the competitive landscape, revenue and prescription forecasts, technology trends, and challenges.

Weak Patent Laws Aid Market Growth of Generic Drugs in Developing Nations

Generic drug manufacturers in developing nations, aided by weak patent laws, are focusing on producing blockbuster drugs that are still under patent protection. "In India, for example, drug manufacturers may patent a process but not a compound, thus, generic drug makers are able to synthesize the compound through another process and may legally introduce another version of the drug," explains the research analyst of this study. "In this manner, they can benefit from the original manufacturer’s ongoing advertising and promotion of the drug while eliminating the need to depend on the American and European generics producers."

In an endeavor to avoid the stringent patent processes, generic manufacturers may lose some quality in the process of reengineering drugs. Several Asian and ROW generics producers have faced similar difficulties and one recent example is the removal of two generic HIV drugs produced by a prominent Indian pharmaceutical company from the WHO list of approved medications meant specifically for patients in Africa.

Consumer Belief in Branded Products Restricts Use of Generics

Though generics and biogeneric drugs are emerging as strong contenders to branded medications, a number of consumers in developed nations have a perception that branded products are more effective than unbranded ones. "Certain patient populations tend to view healthcare benefits as entitlements rather than privileges and resist shifting from more expensive to less expensive options," says the analyst. Even when they are compelled to switch drugs, they shift from one brand to another - popularly known as a ‘brand name shift’ - despite the availability of low-cost generics. This is one challenge that generic drug manufacturers are likely to find hard to overcome in their quest to extend market reach.

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