The generics industry provides a notable bright spot amidst escalating U.S. healthcare costs, which are projected to hit $2.9 trillion in 2013 and reach $4.5 trillion by 2020. Generics have saved U.S. consumers an estimated $1 trillion over the last decade. Growth in the U.S. generics market will be driven by the loss of patent protection for a number of brands; between 2013 and 2020, over $155 billion in brand sales will lose patent protection.
While the leaders in the generics market include large U.S. and multinational players Teva Pharmaceutical Industries, Mylan, and Actavis, India-based companies have emerged as a growing competitive force in the U.S. generics landscape. In 2012, over 20% of the retail generic prescriptions dispensed were from Indian firms, and included the biggest prize of 2011: Ranbaxy Laboratories’ first-to-file rights for generic Lipitor (atorvastatin). This trend looks to continue for the near term as India leads in Type II drug master filings and in 2013, for the first time, India-based companies surpassed U.S. companies with the most ANDAs filed.Despite their progress penetrating the U.S. generics market, Indian companies face a number of sizable challenges to remain competitive. Patent events will progressively shift from oral, small-molecule generics to more-complex formulations and biosimilars opportunities, which will require increased R&D spend and more-advanced manufacturing technologies. Perhaps most importantly, product quality has emerged as a new priority for success in the U.S. generics market, a topic that Indian companies know all too well from the recent lapses by Ranbaxy and others, and for which the FDA proclaimed was one of their “highest priorities” in 2013.
Markets covered: United States, India.