INTRODUCTION

STUDY GOALS AND OBJECTIVES

This report provides a range of information–from detailed market analyses through industry trends–to quantify and qualify the market for prescription generic drugs. Forecasts of product categories and industry trends are provided for the U.S. market and, when available, for international markets. Forecasts and trends are gleaned from interviews with industry sources as well as from considered assessment of available and emerging technologies. The report develops forecasts for the generic drug market for major therapeutic categories through 2003 and also examines strategies employed by generics-only companies and generics divisions of branded pharmaceuticals firms to meet the challenges of this highly competitive market. The regulatory environment affecting the generics industry is analyzed country-by-country, as is the impact of the General Agreement on Tariffs and Trade (GATT).

REASONS FOR DOING THE STUDY

Issues driving the international generic drug industry include patent expirations of many of the best-selling drugs within the next decade, the increasing presence of managed care and other cost-containment efforts in the U.S. and international markets, and increasing numbers of prescriptions filled with less expensive generic alternatives. By 2000 it is projected that, in the U.S., generics will surpass branded products in the number of new prescriptions written. Generics represent a smaller percentage of prescriptions written in most other countries but are gaining share almost universally. In 1998, generics represented approximately 9% of the inter-national pharmaceutical market and 12% of the U.S. drug market in dollars. The generics drug market is projected to enjoy double-digit growth throughout the forecast period, compared to 5% to 6% growth projected for branded products.

CONTRIBUTIONS OF THE STUDY AND FOR WHOM

This report provides a thorough analysis of the prescription generic drug market, offering information needed to understand the current market and to approach the emerging one. It is an invaluable tool for business planners, acquisitions specialists, licensing strategists, product managers, market research analysts, investor consultants, and anyone interested in the prescription generic pharmaceuticals market, its products, its industry participants, and its future.

SCOPE AND FORMAT

The scope of this study is worldwide, although the focus is the U.S. market. All major therapeutic categories for prescription generic drugs are forecasted and discussed. Markets addressed include Canada, France, Germany, Italy, Japan, Mexico, Spain and the U.K., with a special section on emerging markets such as Russia and South America. The major emphasis of the report is the U.S. generic drug industry because of its maturity, current size, potential for market growth, and leadership in generic and therapeutic drug substitution.

The overview section presents the market trends affecting generic drug industry growth and prescribing, a comprehensive market size and growth analysis for the U.S. prescription generic drug industry over the period 1996 to 2003, and describes industry and regulatory activities that will shape the future of the industry.

The government regulation section provides an assessment of the U.S. Food and Drug Administration (FDA) relationship with the generic drug industry, generic drug development and regulatory approval requirements, and the performance and productivity of the FDA in approving prescription generic drugs.

The patent analysis section presents the leading generic drug opportunities by U.S. dollar volume between 1996 and 2003, as well as an assessment of the current and evolving impact of various international regulatory and trade protocols and practices–including the 1995 GATT treaty–on U.S. patent extensions and other factors affecting the international generic drug market.

The market analysis section comprises the focus of the report. It presents sales data and market size estimates for each major therapeutic category, including biotechnology products, products within each category open to generic competition, the degree of historic and future generic penetration, and forecasts of market size. Lastly, it estimates growth rates for each major therapeutic category over the period 1996 through 2003.

Therapeutic categories discussed in this report include:

• antiarthritic/analgesic agents
• anticancer agents
• anti-infective agents (including antibacterials, antifungals and antivirals)
• biotechnology drugs
• cardiovascular agents
• central nervous system agents
• gastrointestinal agents
• hormones
• respiratory agents
• other generic drugs (including anesthetics, antidiabetic agents, antiemetics, dermatologicals, immunosuppressive agents, ophthalmic drugs, and treatments for benign prostatic hyperplasia)

Market figures are based on revenues at the manufacturers’ level and are projected at 1998 dollar value— that is, inflation is not computed into the projection figures.

The international generic drug industry section provides an assessment of selected major international generic drug markets. It describes drug pricing policies, cost containment efforts, and political and economic trends affecting the growth of each major generic drug market; and projects, for selected countries, the current and future market size estimates and growth rates.

The section on generic drug market strategies provides an assessment of the key factors for success as viewed by senior management of generic drug companies as well as the strategies employed by research-based pharmaceutical companies to successfully compete in the generic drug industry.

Profiles of leading generics-only companies and generic divisions of research-based pharmaceutical companies are provided.

METHODOLOGY

Information to prepare this study was derived from interviews with marketing strategists, industry executives and others at leading companies in the generic drug industry. Discussions were also held with government agencies and regulatory bodies that monitor and/or regulate generic drugs. Physicians and pharmacists were surveyed to assess prescribing practices and opinions on products. Searches of secondary material such as company annual reports and 10Ks, journal articles, prospectus assessments, government resources, and data from health care institutions were also conducted.

INFORMATION SOURCES

Information to prepare this report was obtained from primary interviews with companies, industry analysts, healthcare personnel, trade associations such as the Generic Pharmaceutical Industry Association and National Association of Pharmaceutical Manufacturers, government agencies such as the Office of Generic Drugs of the U.S. FDA, literature searches, annual reports, 10Ks, and product literature.

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