Generic Pharmaceutical Manufacturing in the US Industry Market Research Report Now Available from IBISWorld

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While the growing Generic Pharmaceutical Manufacturing industry has been experiencing strong internal and external competition, the patent expirations of several brand-name drugs will create growth opportunities in the short term. Furthermore, healthcare reform will benefit the industry, with more consumers gaining insurance coverage for prescription drugs, improved generic drug approval processes and an established pathway to approval for biosimilars. As in the past five years, manufacturers will also pursue opportunities in biosimilars and emerging markets. Continued growth in the industry will further attract new entrants, but sustained consolidation will hamper the increase in the number of operators. For these reasons, industry research firm IBISWorld has added a report on the Generic Pharmaceutical Manufacturing industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

The expiration of major drug patents will boost demand for generics in the short term

The $52.8-billion Generic Pharmaceutical Manufacturing industry continues to outpace growth in the Brand Name Pharmaceutical Manufacturing industry (IBISWorld industry report 32541a). During the five years to 2012, industry revenue is expected to increase at an average annual rate of 5.4%. According to IBISWorld industry analyst Sophia Snyder, “Sales growth in recent years slowed slightly due to the recession and pricing pressures from large wholesalers and retailers.” IBISWorld expects revenue will continue to increase in 2012, thanks to an improved economic environment and the most significant year of the brand-name drug patent cliff.

Brand-name manufacturers faced a significant patent cliff beginning in 2011. In 2012 and the years ahead, several blockbuster-branded drug patents are set to expire, opening up the market to generic versions. This factor will stimulate industry sales but threaten the long-term viability of generics since less innovative drugs are being developed. In response, generic manufacturers are moving into biosimilar production, a relatively new product segment for the Generic Pharmaceutical Manufacturing industry. Additionally, more players are focusing on emerging markets, Snyder says, where growth will likely be strong as consumers demand cheaper alternatives to brand-name medicines. The number of companies continues to grow, as entrants are enticed by the industry's strong profit margins. During the five years to 2012, the number of operators is expected to increase to 1,103, representing average annual growth of 1.6%. For many years, generic companies were the small players in the pharmaceutical industry, with modest growth rates and little or no international business operations. As generic companies have grown, often by acquisition, they have developed an even greater need to consolidate because biologics, which are difficult to make into generics, are becoming a larger portion of industry sales. The long overdue consolidation in the generic drug industry has been particularly active during the past five years. Teva is the largest public company in the industry; others include Watson Pharmaceuticals Inc., Sandoz Ltd. and Mylan Inc.

Continued growth in the industry will further attract new entrants, but sustained consolidation will hamper the increase in the number of operators. Also, healthcare reform will largely benefit the industry, with more consumers gaining insurance coverage for prescription drugs, improved generic drug approval processes and an established pathway to approval for biosimilars. For more information, visit IBISWorld’s Generic Pharmaceutical Manufacturing report in the US industry page.

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IBISWorld industry Report Key Topics
Generic pharmaceutical and medicine manufacturers develop prescription and over-the-counter drug products that are used to prevent or treat illnesses in humans or animals. Generic drugs are produced and distributed without patent protection, and industry operators are not significantly engaged in the research and development of new drugs. The industry does not include manufacturers of nutritional supplements or cosmetic beauty products.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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