The upcoming spate of patent expirations bodes well for the European generics market. The growing loss of patent protection on blockbuster brands over the next few years, coupled with the rising need to contain spiralling healthcare costs, is set to provide a fillip to market expansion.
Recent analysis by Frost & Sullivan reveals that the European generics and biogenerics market is estimated to grow from USD 10.9 billion in 2003 to USD 21.2 billion in 2010.
As most European governments strive to reimburse part or all of the cost of prescription medicines, price controls have become integral to containing excess spending. It is estimated that the use of generic products in Europe has yielded an annual cost savings of nearly USD 25 billion over branded medications in 2003.
"The increasing desire to contain healthcare spending is likely to be one of the major factors spurring the uptake of these cheaper options," notes Dhiraj Ajmani, Senior Analyst with Frost & Sullivan.
The Netherlands and the United Kingdom have well-established markets for drugs sold under their generic names. In France, generics have begun to take a firmer hold on the pharmaceuticals market, while in Italy, the development of the generics market is progressing more slowly. Overall, the use of generics has been strongest in Germany and the United Kingdom.
"Generics are preferred mainly because of their 20 to 80 per cent price differential from the patent-expired brand," says Mr. Ajmani. "Removing generics from the health economics equation is likely to render the EU healthcare systems financially unsustainable."
Government healthcare providers have played a pivotal role in spearheading this initiative. Increasingly, they have begun to adopt generics either as a step therapy (sequential use of least expensive medications before prescribing the more expensive drugs), or as a formulary alternative for which participants make the lowest co-payment.
However, even while the generics and biogenerics market demonstrates great potential, unclear regulatory processes and patent issues are likely to pose a major challenge. This difficulty is likely to be more prevalent in the case of biogenerics that are much more complex formulations compared to the generics.