Asian generics makers to focus on market expansion

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According to a report by researchers at Frost & Sullivan (F&S) the Asian generics market will grow at a compound annual growth rate (CAGR) of 17–18% between 2014 and 2018 [1].

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However, with fewer blockbuster drugs expected to go off patent in 2015–2017, there will be fewer opportunities for generics makers in Asia. Hence, generics makers in the region are expected to look beyond the patent cliff and to focus instead on market expansion and improving the quality of existing drugs.

To counter the patent cliff, and driven by the fact that the pipeline for new molecules was still weak in 2014, some major brand-name drugmakers, including Pfizer and Sanofi, have turned to generics. In contrast, some generics majors are restructuring their business models to survive the competition and have also invested heavily in research and development. But as the impact of these investments can be seen only after five years or more, originator molecules are not expected to be a major driver in Asia quite yet.

The report found that in Asia, India is a major market for generic drug manufacturing, followed by South Korea and Japan. While Indonesia, Malaysia and Taiwan also offer promise.

Government initiatives are also increasing the domestic market for generics in Asia:

Japan: The government aims to increase the volume of generics prescriptions from 25% in 2012 to 60% by 2018.

India: The new government’s universal health plan will roll out this year and cover the entire population by 2019. The state governments are promoting the use of generics in state-run public hospitals to cut down on healthcare costs.

Indonesia: The universal health coverage scheme implemented in January 2014 is driving the demand for medicines.

‘Pharmaceutical companies are expected to particularly invest in new chemical entities (NCE) and super generics in the next three to five years and generics manufacturers in countries like Malaysia are looking for new markets like Brazil and other Latin American countries,’ according to Frost & Sullivan Healthcare Industry Manager Siddharth Dutta.

Related articles
Global generics markets predicted to grow to US$221 billion by 2016

Japan’s generics sector set to grow

Reference
1.   Dutta S. Lazar J. Patent cliff and the future of generics in Asia: trends that will impact the market in the short term. Frost & Sullivan. 19 Dec 2014.

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