Generics growth set to decelerateDocument Transcript
Generics growth predicted to decelerateRevenues generated by the generics industry have continued to grow strongly, asillustrated by a 2005–09 compound annual growth rate (CAGR) of 10.3%, with Datamonitorestimating the global generics market to be worth nearly $80 billion last year.The global generics industry has evolved significantly over the past decade; it has become anincreasingly integral element of the prescription pharmaceutical sector and, helped by aggressiveM&A strategies, its two leading players—Teva and Sandoz—sit just below the Big Pharma peerset in terms of scale.Simon King, pharmaceutical analyst at Datamonitor, comments: “Sales growth has been driven bytwo key factors; growing demand for cheaper pharmaceuticals as a means to contain healthcareexpenditure and a succession of patent expirations on heavily prescribed branded ‘blockbuster’products, which the generics industry has capitalized on.“As a result, a robust period of growth for the generics industry has run concurrent to an‘indifferent’ performance for the much of the branded pharmaceutical sector.”However, Datamonitor forecasts that sales growth for the generics industry will begin to slow, witha CAGR of 5.0% forecast for the period 2009–15. Closer analysis reveals that a deceleration insales growth will take hold from 2012 onwards as demonstrated by a global CAGR of 3.7% for theperiod 2012–15 versus a 6.3% CAGR for the period 2009–12.This pattern maps to the widely perceived end of Big Pharma’s ‘patent cliff’, with 2012 oftenviewed as a nadir given the anticipated loss of exclusivity for the branded industry’s biggestselling product—Pfizer’s $12 billion-a-year Lipitor (atorvastatin) franchise—in late 2011.Simon concludes: “In short, the level of branded revenues associated with blockbuster productsthat have become exposed to the generics industry via patent expiration will begin to decreasesharply from 2012 onwards.“This sharp decline—driven partly by a fall in Big Pharma’s blockbuster productivity over the pastdecade—will deprive the generic industry of significant revenue injections. The end of this ‘goldenera’ of patent expiries will fundamentally shift the generics landscape as sections of the widerpharmaceutical market become more commoditized.”EndsFind out more with Datamonitors Generic Market Outlook: 2015!If you have any questions regarding this report please feel free to email us. Alternatively contactus on +1 312 416 2834 or 44 (0) 161 238 4040 for more information.