Positive Outlook for Global Generic Drug Market as Countries Worldwide Promotes Generics to Help Control Healthcare Costs, Says TrendForce

Aging population and rising costs of new drugs have increased healthcare expenses in countries across the globe and spurred governments to expand the use of generic drugs. Currently, there are factors constraining the development of generics. The U.S., for instance, is pushing the international adoption of patent linkage via the Trans-Pacific Partnership (TPP) and Bilateral Free Trade Agreements (BFTAs). Other risks include stringent regulations concerning the quality levels of drugs and their manufacturing processes. Nonetheless, the global generic drug market is expected to grow steadily. Global market research firm TrendForce forecasts that the scale of the global generic drug market will reach US$314.9 billion in 2016 and grow to US$409.9 billion in 2019, registering a CAGR of 8.7% during this period.

The significance of generic drugs is they make treatments of diseases affordable for most people. Sean Liu, TrendForce biotechnology analyst, said rising healthcare costs are straining many countries’ finances, compelling them to lower healthcare expenses by increasing the penetration rates of generics in their national drug markets. Japan’s Ministry of Health, Labor and Welfare, for instance, has been very active in approving generic drugs and seeks to raise the penetration rate of generics in the country’s total prescription volume to 80% by 2020. France also plans to rein in its healthcare expenses by controlling drug prices and increase the prescriptions of generics. France aims to have generic drugs account for at least 25% of the national drug spending by 2017.

Sensing huge business opportunities, major pharmaceuticals companies have accelerated the development of their generic drug ventures. The U.S. is currently the largest pharmaceutical market and remains highly competitive despite slowing growth. Japan has also received much attention because of the government’s aggressive efforts to promote generic drugs, and large multi-national branded pharmaceuticals companies such as GlaxoSmithKline (GSK) and Sanofi have been keen to enter this market. As for the emerging markets, countries that are showing enormous growth potential include Mexico, Saudi Arabia, India and China. 

About Generic Drugs
A generic drug product has the same active molecular ingredients, dosage form and dosage strength as another branded reference drug product. It has been clinically proven to have the same level of effectiveness and safety as the reference drug.