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This report was presented at the Pharma Tech 2013 Conference - India A Game Changer in the Pharma Industry at Ahmedabad, India in December 2013. The presentation highlights the overview of the global generic pharmaceuticals market, with particular focus on the key market trends and challenges by therapeutic areas and geographies including the U.S, EU and India. List of key blockbuster drugs scheduled to lose patent protection between 2010 and 2020 have been included. Additionally impact of regulation on generic drugs by region and strategic recommendations for the success of market participants are also covered in this report.
Citation preview
Global Generic Pharmaceutical Market – Qualitative
and Quantitative Analysis
Aiswariya Chidambaram
Senior Research Analyst - Life Sciences
Pharma Tech, Ahmedabad
12-11-2013
2
Focus Points
Focus Points
Generics Lead the Way Ahead
Global Generic Pharmaceutical Market – Patent Cliff
Key Therapeutic Areas Overview
Key Therapeutic Areas Growth Analysis
Key Market Drivers and Challenges
Mergers & Acquisitions Outlook
Competitive Landscape Analysis
U.S. Generic Pharmaceutical Market Overview & Regulatory Analysis
European Generic Pharmaceutical Market Overview & Regulatory Analysis
Strategic Recommendations
Indian Generic Pharmaceutical Market Overview & Regulatory Analysis
Future Trends and Directions – Vision 2025
Generics Lead the Way Ahead
Source: Frost and Sullivan
Blockbuster drugs ($150 billion) to lose
patents between 2010
and 2017.
The top eight
global markets
comprise 80% of
the total generic
sales.
The global generic pharmaceutical market worth over $150 billion in 2013, growing at CAGR (2013 – 2018) of 8.4%
India and China - huge generic markets in production volume.
The top ten global generic companies account for 47% market share.
U.S world’s largest generics market (45%).
Over the next five
years
Emerging markets -
15 % to 20% growth.
Matured markets – 6%
to 10% growth.
Global Generic Pharmaceutical Market – Patent Cliff
0
5
10
15
20
25
30
35
40
45
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
24.33
16.95
27.79
33.43
42.11
33.18
7.08
15.21
8.13 7.96
2.96
Sa
les
($
Bil
lio
n)
Year
Total Pharmaceutical Market: Sales Value of Drugs Losing Patent
Protection (Global), 2007 - 2017
Generic companies have been proactive in
filing for marketing rights and exclusivity
well ahead of patent expiry.
Ranbaxy was the first filer of ANDA for
generic Lipitor in November 2011 while
Watson Pharma was to sell authorised
generic version in the U.S.
Teva was awarded with 180 days
exclusivity to sell generic Losartan while Hi
Tech Pharmacal successfully challenged
J&J’s Levaquin (oral solution).
The U.S. patent for AstraZeneca’s Crestor
was challenged by Apotex, Mylan and
Sandoz.
Key Therapeutic Areas Overview
Cardiovascular and CNS are the two largest market segments, constituting nearly 38% of the global generic
pharmaceutical market together.
However, therapeutic segments such as Respiratory, CNS and Oncology are likely to witness significantly high
growth rates, attracting the attention of market participants.
On the contrary, segments such as Diabetes and Genitourinary/ hormonal drugs are expected to decline by the
2017.
Generic Pharmaceutical Market: Percent Revenue Contribution by Therapeutic Segments (Global)
Others include Gastro-intestinal, HIV, Immunology and so on.
Note: All figures are rounded;. Source: Frost & Sullivan
16.1%
21.7%
0.2%
4.3% 4.5% 8.3% 3.4%
6.4%
35.1%
CNS Cardiovascular Dermatology Genitourinary/Hormonal Drugs Respiratory Rheumatology Diabetes Oncology Others
Key Therapeutic Areas – Growth Analysis
Cardiovascular
2%
4%
6%
8%
10%
12%
14%
CNS Oncology Rheumatology Respiratory Diabetes
Declining
Fast Growing Growing
Development/ Fast Growing
Declining Stable
Source: Frost & Sullivan analysis.
Dermatology
Growing
Bubble size represents market value
Genitourinary
Development/ Fast Growing
One of the promising segments for generic participants to venture between 2010 and 2015 is oncology as drugs worth $10 b are set to lose patent protection by 2015
Intense competition, promotion of branded drugs and new innovative formulations such as inhalable insulin are all likely to deter the growth of generics.
The reason behind such enormous growth is the massive number of patent expiries. Almost half of the global asthma and COPD market drugs are set to lose patent protection by 2016. Relatively lesser
number of drugs are subjected to generic exposure during the forecast period and hence the decline in growth.
20%
Others
Fast Growing C
A
G
R
The patent expiry of several key antipsychotics and anti-depressants contribute to the rapid growth of CNS drugs market between 2010 and 2017.
Key Market Drivers and Challenges
Key Drivers
Key Challenges Source: Frost & Sullivan analysis
Price control measures
introduced by
governments
Changing population
demographics and
lifestyle patterns
Intense price
competition due to
imports from low-cost
markets
Increasingly
stringent
regulations to
safeguard quality
Patent expiry of key
blockbuster drugs
worth $150 billion. New provisions
introduced by
governments
Access to emerging
markets and niche
therapeutic segments
0
10
20
30
40
50
60
70
80
90
0.00
5.00
10.00
15.00
20.00
25.00
30.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Nu
mb
er o
f D
eal
s
To
tal V
alu
e o
f D
eals
($ B
illi
on
)
Year
Total Value of Deals Number of Deals
Note: All figures are rounded; Source: Frost & Sullivan analysis.
Mergers & Acquisitions Outlook
Generic Pharmaceutical Market: Number of Deals and Amount Spent on Mergers & Acquisitions (Global), 2000 - 2009
The number of deals and the total expenditure on mergers and acquisitions have been increasing steadily over the years
since 2000. There was a peak in M&A activity in 2005 and 2008. The trend is likely to continue with all the key generic
participants increasing their dependence on strategic alliances to conquer market shares.
Source: Thomson Reuters and Frost & Sullivan analysis.
Competitive Landscape Analysis
Generic Pharmaceutical Market: Ranking of Top Five Companies by Market Share (Global)
Source: Frost and Sullivan analysis
Rank
Company
1
2
3
4
5
Mylan
The top five generic pharmaceutical companies
accounted for 40% of the share in the global generic
pharmaceutical market.
The top three companies namely Teva, Sandoz and
Mylan registered significant growth rates of 16, 14
and 11% respectively in 2010 - 2011.
Most of the big companies prefer mergers and
acquisitions to organic growth as a faster means to
consolidate and expand their market shares.
World’s largest generic
pharmaceutical market
represents 45% of global share.
Highly saturated – highest
levels of generic penetration
Predominantly unbranded
generics (INN prescribing)
Characterized by high levels of
generic prescribing, strong IP
legislations, retailers purchasing
on price
Blockbuster drugs worth over
$67 billion to lose patent
protection
More than 500 industry
participants – top five
companies constitute 50% sales
Most attractive hub for low-
cost destinations like India,
China – increased pricing
pressure
Aggressive patent challenges
and Paragraph IV filings
Mergers and acquisitions -
most sought-after trend in the
U.S.
Market Overview
U.S. Generic Pharmaceutical Market
11
Key Blockbuster Drugs Losing Patent Protection – U.S.
2010 2011 2012 2013 2014 2015 2016 2017
Atorvastatin Clopidogrel Candesartan
Cilexetil Duloxetine Aripiprazole
Epoetin alfa
(Procrit/ Eprex) Adalimumab
Oseltamivir
Docetaxel Goserelin Enoxaparin Filgrastim Celecoxib Imatinib
mesylate Ezetimibe -
Donepezil Latanoprost Epoetin beta Insulin
lispro
Darbepoetin
alfa Pregfilgrastim
Lopinavir
with
Ritonavir
-
Fluticasone
propionate with
Salmeterol
Xinofoate
Levofloxacin Escitalopram
Oxalate
Interferon
beta – 1a
(Avonex
Esomeprazole
Magnesium Rituximab
Olmesartan
Medoxomil -
Gemcitabine Olanzapine Etanercept
Interferon
beta – 1a
(Rebif)
Glatiramer
acetate Trastuzumab - -
Pharmaceutical Market: Key Blockbuster Drugs Losing Patent Protection (United States), 2010-2017
Source: Frost and Sullivan analysis
12
2010 2011 2012 2013 2014 2015 2016 2017
Losartan Pioglitazone Irbesartan Rabeprazol
e Infliximab - - -
Pantoprazole Quetiapine Montelukast Risedronate Raloxifene - - -
- - Peginterferon
alfa 2a
Simvastatin
with
Ezetimibe
Telmisartan - - -
- - Rosiglitazone TacrolimU.S
. Tiotropium - - -
- - Rosuvastatin Oxaliplatin - - - -
- - Sildenafil - - - - -
- - Tolterodine - - - - -
- - Valsartan - - - - -
Key Blockbuster Drugs Losing Patent Protection – U.S.
(continued)
Pharmaceutical Market: Key Blockbuster Drugs Losing Patent Protection (United States), 2010-2017
Source: Frost and Sullivan analysis
13
Regulatory Impact Analysis – U.S.
Pricing & Reimbursement
Regulatory Environment in the U.S Generic Pharmaceutical Market
Gregg-Schumer Act Hatch-Waxman Act
• “Generic companies could
obtain market authorisation
by proving bioequivalence
of generics to brands
• Safe Harbour Provision:
experimental use of
patented drugs permitted by
generic companies
• 180-day market exclusivity
for first-to-file generic
applicant
• 30-month stay for patents
listed in Orange Book
• “Single 30-month stay”
granted to branded
company for patent
infringement suit
• Stay to run concurrently
with FDA’s consideration
of application
• No significant delay in
generic entry
• Allows generic companies
to file counterclaims
against innovators
• Generic drug price ranges
from 90% of brand
equivalent with just 1
competitor 5% with 16-20
competitors
• Medicare Prescription Drug,
Improvement and
Modernization Act (MMA)
2003
• Medicare reimburses drugs
based on weighted average
prices
• Competitive bidding is
practiced
Source: Frost and Sullivan analysis
14 M74E-52
Europe Generic Pharmaceutical Market
Market Overview
Top five countries – Germany,
the United Kingdom, France, Italy
and Spain represent 50% volume
share and 18% value share
globally.
As per EGA, generic drugs
generate savings of €30 billion.
Germany and the UK are highly
penetrated generic markets
Represent 64% and 60% of
volume share respectively in
Europe.
Germany is the largest generic
market in Europe accounting for
27% sales
Source : Frost & Sullivan analysis.
Mature markets (Germany, the
UK) to present sluggish growth
between 5 – 6%
Italy and Spain are expected to
register higher growth rates
between 18 – 20%
Eastern Europe to contribute
maximum growth
Europe primarily dominated by
branded generics except the UK
Calcium antagonists, anti-
ulcerants and platelet inhibitors
to face high generic competition
Highly fragmented market with
county-specific regulations
15
Drug France Germany Italy Spain U.K.
Anastrozole 2010 2010 2010 2010 2010
Aripiprazole 2011 2011 2011 2011 2011
Atorvastatin 2011 2011 2011 2011 2011
Candesartan Cilexetil 2012 2012 2012 2012 2012
Celecoxib 2014 2014 2014 2014 2014
Clopidogrel 2013 2013 2013 2013 2013
Darbepoetin alfa 2014 2014 2014 2014 2014
Docetaxil 2010 2010 2010 2010 2010
Donepezil 2012 2012 2012 2012 2012
Pharmaceutical Market: Key Blockbuster Drugs Losing Patent Protection (Europe), 2010-2017
Key Blockbuster Drugs Losing Patent Protection – Europe
16
Drug France Germany Italy Spain U.K.
Duloxetine 2012 2012 2012 2012 2012
Escitalopram Oxalate 2014 2014 2014 2014 2014
Esomeprazole Magnesium
2010 2010 2010 2010 2010
Etanercept 2014 2014 2014 2014 2014
Ezetimibe 2017 2017 2014 2017 2017
Fluticasone propionate with Salmeterol xinofoate
2013 2013 2013 2013 Invalidated
Glatiramer acetate 2015 2015 2015 2015 2015
Imatinib mesylate 2016 2016 2016 2016 2016
Infliximab 2014 2014 2014 2014 2014
Key Blockbuster Drugs Losing Patent Protection – Europe
(continued)
17
Drug France Germany Italy Spain U.K.
Insulin glargine 2014 2014 2014 2014 2014
Insulin lispro 2010 2010 2010 2010 2010
Interferon beta 1a (Rebif) 2013 2013 2013 2013 2013
Irbesartan 2013 2013 2013 2012 2013
Levofloxacin 2011 2011 2011 2012 2011
Lopinavir with Ritonavir 2016 2016 2016 2016 2016
Montelukast 2012 2012 2012 2012 2012
Mycophenolate mofetil 2010 2010 2010 Expired (2007) 2010
Olanzapine 2011 2011 2016 2011 2011
Key Blockbuster Drugs Losing Patent Protection – Europe
(continued)
18
Drug France Germany Italy Spain U.K.
Olmesartan medoxomil 2017 2017 2017 2017 2017
Oseltamivir 2017 2016 2017 2017 2016
Oxaliplatin 2013 2013 2013 2013 2013
Pegfilgrastim 2017 2017 2017 2017 2017
Peginterferon alfa-2a 2013 2013 2013 2013 2013
Pioglitazone 2011 2011 2011 2011 2011
Quetiapine N.M 2012 2012 2012 2012
Rabeprazole Expired (2007)
2012 2012 2012 2012
Risedronate 2010 2010 2010 2013 2010
Key Blockbuster Drugs Losing Patent Protection – Europe
(continued)
19
Drug France Germany Italy Spain U.K.
Rituximab 2013 2013 2013 2013 2013
Rosiglitazone 2013 2013 2013 2013 2013
Rosuvastatin 2017 Not mentioned 2012 Not mentioned 2017
Sildenafil 2013 2013 2013 2013 2013
Telmisartan 2013 2017 2017 2013 2017
Tiotropium 2016 2015 2014 2015 2012
Tolterodine 2012 2012 2012 2012 2012
Trastuzumab 2012 2012 2012 2012 2012
Valsartan 2011 2011 2011 2011 2011
Zoledronic acid 2012 2012 2012 2012 2012
Key Blockbuster Drugs Losing Patent Protection – Europe
(continued)
20
Regulatory Impact Analysis - Europe
Data Exclusivity
8+2+1 Formula European Bolar Clause Sunset Clause
Regulatory Environment in the European Generic Pharmaceutical Market
• Uniform level of data
protection of
originator products for
10 years
• Permits to access data
of a generic
application but the
generic version
cannot be launched
until the completion of
the ten-year period
• Originator companies
are granted 8-year
data exclusivity and 2
years market
exclusivity
• Additional one year
exclusivity awarded
for new product
indications and those
shifting from
“prescription only” to
OTC
• Generics can enter the
market only after the
10th or 11th year
• Permits initiation of
generic R&D activity
prior to patent
expiry of brands
• Withdrawal of
brands before
generic entry cannot
stop generic
companies from
using them as
reference products
• Allows cancellation
of marketing
authorization for
products not in
market for 3 years
• Legal challenges by
patent owners can
prevent generic
companies from
applying
registrations more
than 3 – 4 years in
advance of patent
expiry
European Bolar Clause
Source: Frost & Sullivan analysis.
21
Regulatory Policies of Key Generic Markets in Europe -
Comparative Analysis
Policies Germany United
Kingdom France Spain Italy
Reference pricing
Patient co-payment
Generic prescribing
Generic substitution
Time delay in market
access
Generic Pharmaceutical Market: Impact of Regulatory Policies (Europe)
Source: Frost & Sullivan analysis. Low High
Branded generics dominate the
Indian pharma market (98%)
valued at over $12.00 billion
World leader in exporting
generics to foreign countries;
exports growing at 22%
Anti-infectives and GI constitute
30% revenue share
India produces 20 – 22% of
world’s generic drugs including
nearly 60,000 generic brands
covering 60 key therapeutic
areas
Ranks third in API
manufacturing accounting for
6.5% of world API production
Highly fragmented market with
more than 22,000 registered
units
Companies such as Sun,
Lupin, Aurobindo, Dr.Reddy’s
Laboratories, Cipla and Ranbaxy
have been aggressive in DMF
and ANDA filings with an
granted approval rates of 35%
Top ten players account for
37% market share in India
Consolidation in the form of
strategic alliances between
Indian and foreign companies is
on the rise
Extremely promising future for
generics in India
Market Overview
Indian Generic Pharmaceutical Market
Source: Frost and Sullivan analysis
Export of Indian Generics to the U.S.
Domestic
48 % Export
52 %
Total Pharmaceutical Market: Breakdown by
Domestic Sales and Export Sales (India)
Steep rise in export of Indian generics to
the U.S. over the last five years
Currently generic drugs from India
represent 18% of generic drugs in the U.S.
India has more than 75 U.S. FDA approved
plants and tops the world in DMF and ANDA
filings in the U.S.
Indian generic firms directly compete with
multinational generic companies leading to
Intensified price competition in the U.S.
It is estimated that India is likely to capture
at least 30% of replacement generic
equivalents in the U.S. by 2018
Source: Frost and Sullivan analysis
Regulatory Impact Analysis - India
Pharmaceutical Policy Drug Policy 1996
Pharmaceutical Policy 2002 National Pharmaceuticas Policy 2006
Quality Control Price Control IPR Protection
On Prices On Margin
Bulk Drugs Formulations
Essential Commodities Act 1955 Drug (Price Control) Order 1995
GMP/cGMP Amended Patents
Patents Amendment Act 2005 Drug and Cosmetic Act 1940
Schedule M Schedule Y
Source: Frost and Sullivan analysis
25
Regulatory Impact Analysis – India (continued)
Quality Control
Regulatory Environment in the Indian Generic Pharmaceutical Market
Patent Protection/ IP Rights Pricing & Reimbursement
• The revised policy of the
National Pharmaceutical
Policy Authority, has
capped margins on generic
drugs at 15% for
wholesalers and 35% for
retailers
• Price controlled drugs
Category I: Essential drugs
Category II: All drugs not in
Category I
• Drugs exempted from price
control required to meet
specific criteria
• Patents Amendment Act
2005 (TRIPS Agreement)
strictly prohibited reverse
engineering of drugs
• Covers two types of
generic drugs – off patent
generics and generics of
drugs patented before
1995
• Introduced compulsory
licensing for exports
• Mainly encourages foreign
companies to trade in
India
• The Drug and Cosmetics Act
(D&C) 1940 regulates
import, manufacture,
distribution and sales
• Schedule M – requirements
for factory premises, plant,
materials, plant and
equipment
• Schedule Y – legislative
requirements for clinical
trials
• Increasing regulatory
compliance in India boosts
confidence of MNCs
Source: Frost and Sullivan analysis
Future Trends and Directions – Vision 2025
Technology
Development of Transgenic technologies
Stem cell technologies
Cloning technologies
Source: Frost and Sullivan analysis
Key Trends
Balance in terms of healthcare expenditure and sales revenue is likely to shift from developed
markets to emerging markets.
Consolidation is expected to remain the key factor for growth and sustenance of generic
companies.
Large generic companies are likely to increase their investments in R&D activities
Increasing focus on higher value biological therapies, biosimilars,
controlled release products, sterile formulations and niche therapeutic segments.
Generic consumption is likely to be favoured in a big way by the government, payers,
policy-makers and physicians.
Strategic Recommendations for Success
Source: Frost and Sullivan analysis
Differentiated Approach Explore New Avenues Instill Competitive Capabilities Plan Ahead for the Future
Big multinational generic
firms require to focus on
Products with
technologically
challenging formulations.
Products which require
significant regulatory
support.
Products with limited
availability of APIs.
Medium-sized generic firms
require to focus on
Products with relatively
higher profit margins.
Appropriate time of entry
into the right market.
Analyze prospects for
market globalization
- Strategic alliances
between multinational
generic firms and
domestic participants with
locally restricted
operations.
Strengthen distribution.
Invest in R&D.
Improve product line.
Defend company’s
position in the market.
Strike a balance
between supply and
demand side.
Pioneer new and better
technologies.
Research customer
needs, preferences,
expectations.
Monitor new
technological
developments to face
the change.
Target therapeutic
areas with high levels
of unmet clinical
needs.
Strategy is a style of thinking, a conscious and deliberate process, an intensive implementation system, the science
of insuring future success – Pete Johnson
28
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Questions
30
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AISWARIYA CHIDAMBARAM
Senior Research Analyst – Life Sciences
Your Growth Partner
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