The Global Generic Drugs market size was estimated at USD 335.65 billion in 2022 and is projected to reach USD 582.76 billion in 2030, growing at a CAGR of 7.06% for the forecast period between 2023 and 2030. Multiple factors contributing to the growth of the global generic drugs market are increasing number of patients with chronic diseases, rising geriatric population, technological advancements, government initiatives and rising healthcare costs are driving the demand for generic drugs.
Generic drugs are becoming increasingly popular in both developed and developing countries because they are less expensive and reduces dependency on multinational pharmaceutical companies for developing drugs because it requires less investment to make copies of these drugs after obtaining the patent holder’s permission. As the patents of branded drugs are expiring, the global market for generic drugs will expand rapidly. Favorable policies in various nations that aim to lower overall healthcare costs and minimize the spread of chronic diseases are facilitating growth. Although, factors such as stringent regulations, quality issues and decreasing profit margin are some of the factors that can hinder the growth of global generic drugs market.
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Increasing Prevalence of Chronic Diseases and Geriatric Population
The increasing prevalence of chronic diseases and the growth of the geriatric population are two significant factors that have a substantial impact on the global generic drugs market. Chronic diseases such as cardiovascular, neurological, diabetes, and respiratory conditions are becoming increasingly common worldwide due to several factors, including changes in lifestyle, aging population, and environmental factors. By 2060, a projected 48 million individuals (47% of all fatalities worldwide) are estimated to lose life due to serious health-related suffering, an 87% increase from 26 million in 2016. 83% of these casualties are expected to take place in low- and middle-income nations.
Cardiovascular Drugs Contributes to Major Market Share
Cardiovascular generic drugs contributed one-third of the total market share in 2022, globally. As per World Health Organization (WHO), cardiovascular diseases are the major cause of the global mortality rate marking nearly 17.9 million deaths per year worldwide. Heart attacks and strokes account for over 80% of cardiovascular deaths, with about a third of these fatalities happening prematurely among individuals below the age of 70 years. An unhealthy diet, physical inactivity, consumption of tobacco, and excessive alcohol consumption are the primary behavioral factors that significantly contribute to heart disease and stroke. These behaviors can lead to elevated blood pressure, increased blood glucose levels, elevated blood lipids, as well as overweight and obesity, manifesting as potential effects of these risk factors on individuals.
Oral Drugs Being the Most Preferred Route of Administration
The oral generic drug segment held two-thirds of the market share in 2022 globally. Among the different methods of drug delivery, oral administration is preferred over injectable due to its numerous advantages. These benefits encompass safety, high patient adherence, easy ingestion, avoidance of pain, and the ability to accommodate a wide range of medications, making it a versatile option. Hetero, a pharmaceutical company based in Hyderabad, India, declared in 2022 that its generic form of the COVID-19 oral antiviral treatment candidate nirmatrelvir had obtained approval from the World Health Organization Prequalification of Medicines Program (WHO PQ).
Technological Advancements
With the advent of RPA (Robotic Process Automation) and AI in the pharmaceutical industry, automation has helped in overcoming difficulties and improving efficiency. RPA and AI aid in increasing productivity, lowering costs, and improving performance. Through automation, these technologies also assure regulatory compliance within an organization’s process. Artificial intelligence, machine learning and natural language processing are being used extensively in research and development of pharmaceutical drugs. Predictive analytics and natural language processing are used to scan databases of brand name medicine compounds for similar compounds that scientists can use to develop generic drugs. Machine learning is used to determine a compound’s solubility in order to ensure that it retains its effectiveness over time.
Government Initiatives
Governments in developed countries are making efforts to reduce healthcare costs by promoting the manufacturing of generic drugs. On the other hand, healthcare industries in developing countries are affected by issues like affordability and accessibility. In the United States, the Food and Drug Administration (FDA) has taken various steps to expedite the approval process for generic drugs, including the Generic Drug User Fee Amendments (GDUFA) program, which aims to speed up the review of generic drug applications. In the European Union, the European Medicines Agency (EMA) has also implemented initiatives to streamline the approval process for generic drugs, such as the generic medicines work-sharing initiative, which allows regulators from different countries to work together to assess the safety and efficacy of generic medicines. Overall, these initiatives by governments around the world are helping to increase the availability and affordability of generic drugs, thereby improving access to healthcare for patients.
Impact of COVID-19
The COVID-19 pandemic had a short-term and long-term impact on the pharmaceutical sector. Short term impacts such as demand change, panic buying, supply shortage of API (active pharmaceutical ingredient) and finished products. Long term impacts such as delayed approvals for non-COVID-related pharmaceutical products, ethical considerations, and consumption trend changes in health-related products. Supply chain was one of the major factors that impacted the generic drugs market, many countries rely on India and China to produce generic drugs, and the pandemic led to disruptions in the production and distribution of drugs due to factory closures and supply chain disruptions.
The pandemic also led to increase in demand for certain generic drugs, particularly those used to treat COVID-19 symptoms such as fever and respiratory distress, which led to shortages of these drugs in some regions and price hikes. Furthermore, the pandemic has also highlighted the importance of investing in research and development for new generic drugs, particularly for COVID-19 treatments and vaccines.
Impact of Russia-Ukraine War
Russia’s invasion of Ukraine affected millions of people, not just in Eastern Europe nations but throughout the world. Drug developers experienced development delays, lost business continuity, and the threat of noncompliance for on-market drugs. Drugmakers such as Novartis, AbbVie, Eli Lilly and hundreds of companies announced a pause or withdrawal of business in Russia. The Director General of Pharmexcil (Pharmaceutical Export Promotion Council of India) expressed concerns about Indian pharmaceutical exports losing ground in the CIS (Commonwealth of Independent States). He also expressed that India might lose a few millions in terms of exports to CIS and Russia, since Russia is one of the top five exporting destinations of India and Ukraine is the third largest exporter of pharmaceuticals for India. Indian drug companies such as Dr Reddy’s Laboratories and Sun Pharma have strong presence in Ukraine and Russia.
Report Scope:
Global Generic Drugs Market Assessment, Opportunities and Forecast, 2016-2030F”, is a comprehensive report by Markets & Data, providing in-depth analysis and qualitative & quantitative assessment of the current state of the generic drugs market globally, industry dynamics and challenges. The report includes market size, segmental shares, growth trends, COVID-19 and Russia-Ukraine war impact, opportunities and forecast between 2023 and 2030. Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.