Global generics drug market to grow 10% annually


Patents expire, competition rises, and outsourcing expands.

The global generic drugs market is expected to grow at a compounded annual growth rate of 10.53% from 2016 through 2020, according to a new report.

In fact, according to, the global generic drugs market will benefit from the patent expiry of drugs worth $150 billion by 2020.

“With many pharmaceutical drugs set to lose their patents during the forecast period, the competition in the generic market is expected to increase,” the report said. “Branded drugs with sales of up to $135 billion expired by the end of 2015, offering pharmaceutical companies opportunities to capitalize on this market.”

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In 2020

In 2020, the largest volume of medications will be generics and non-original branded products, primarily in emerging pharmacy markets such as China, Brazil, India, Russia, Chile, Columbia, Indonesia, Mexico, Pakistan, and Turkey, according to the IMS Institute for Healthcare Informatics. These drug products are often available at lower costs than original branded products and contribute significantly to increased access to medications in these countries.

In addition, more than 90% of U.S. medications will be dispensed as generics by 2020, according to IMS Institute.

“Generic medicines will continue to provide the vast majority of the prescription drug usage in the United States, rising from 88% to 91% to 92% of all prescriptions dispensed by 2020,” stated IMS Institute’s Global Medicines Use in 2020: Outlook and Implications report.

The expirations of branded drug patents have had a signficant impact on the growth of generics. In fact, according to IMS Institute, the increase in U.S. drug spending to $310 billion in 2015 was fueled by new brands and protected brand price increases, offset by the impact of patent expiries.

“The greater use of generics and a small increase in demand for branded drugs contributed to the spending growth,” the organization said.


Savings with generics

Notably, generics that entered the market between 2002 and 2014 reduced the price of medications by 51% in the first year and 57% in the second year following loss of exclusivity, stated IMS Institute.

“Prices of oral medicines were reduced further, by 66% in the first year and 74% in the second year after generic entry,” IMS Institute said in another report.


Another trend influencing the growth of the generic drugs market is the outsourcing of drug development.

“Vendors are increasingly using outsourcing as a business strategy, as they have been experiencing a decline in venture capital investment,” said “Some vendors outsource parts of their R&D process, such as product characterization testing and toxicology testing, to contract research organizations. Similarly, some of them outsource parts or even the entirety of their manufacturing processes to other organizations.” also found that that top manufacturers account for around 26% of global generic sales.

“These vendors continually compete for the top position, with occasional spurts of competition coming from local manufacturers,” the company said. “The market is characterized by the presence of a large number of local, large pharmaceutical companies, and is densely distributed with suppliers.”

However, the top international generic pharmaceutical companies are facing challenges in the form of price pressure, regulatory constraints, and competition from local and international pharmaceutical companies, according to

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