The global generic drugs market size was valued at USD 464.98 billion in 2023 and is projected to hit around USD 776.78 billion by 2033, growing at a CAGR of 5.2% over the forecast period from 2024 to 2033.
The U.S. generic drugs market size was valued at USD 133.44 billion in 2023 and is anticipated to reach around USD 189.77 billion by 2033, poised to grow at a CAGR of 3.5% from 2024 to 2033.
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North America acquired the largest revenue share of 34.69% in the year 2023. U.S. recorded the highest sale in Generics Drugs Market in the year 2021. While the region’s primary healthcare emphasis remains on the pandemic as it moves through the 3rd year of its disruptive impacts and the death toll which approached to 1 million, other key dynamics are playing out with respect to health services utilization, the associated level of spending including patient costs out-of-pocket, and the use of prescription medicines. Understanding these factors of the health care system and how they may develop over the next few years remains critical to stakeholders and decision makers including patients. Spending and drivers for growth reflect the substantial differences in spending levels by stakeholders as rebates and discounts deforms these trends even as the most affecting driver has been the amount which is spent on COVID-19 therapeutics and vaccines.
The growth is attributed to speedy increase in the prevalence of chronic disease in the countries of APAC owing to changing lifestyle which is creating demand for the generic drugs. Additionally, growing demand for the generic drugs for the end users in LATAM and the countries of Middle East and Africa is anticipated to propel industry growth in the next 10 years.
Global generic drugs market is expected to rise at substantial CAGR during the forecast era. The low cost of generics, as an alternative to branded drugs is major factor expected to fuel growth of the target industry in the near future. Additionally, increasing use of RPA to ensure regulatory and standards compliance can create lucrative growth opportunities for the key players operating in the global market.
The use of artificial intelligence (AI) technology to automate routine, rules-based processes is robotic process automation. Through this automation, key operating players in the target market are capable to devote more time, energy, and capitals to advanced value tasks. The use of RPA to ensure compliance with regulatory and standards is one of the major trends in the market for generic brands that will gain traction in the coming years. Company process automation systems such as RPA are commonly used by pharmaceutical firms to conduct high-volume R&D and production activities. RPA technology includes software that logs into programs, enters data, measures and completes the necessary activities, and logs out. It aims to ensure conformity with laws and requirements, to complete procedures at a faster speed and to reduce costs.
Generic companies are finding it more difficult to launch new medications as originator products that have gone off-patent become more difficult to develop, produce, and market. When comparing the status of generic firms to that of industrial or communications companies, it is clear that generic companies have a larger and more diverse range of options to pick from. Over $217 billion in original patents are set to expire shortly, and they cover everything from biologics to oral solids, injectable, and inhalers to over-the-counter (OTC) drugs.
By 2024, industry analysts predict that generics will have the luxury of generating $60 billion in net growth. Now is the moment for businesses to carefully consider where they should invest before deciding on their next product. As shown below, opportunities and obstacles differ substantially from one product category to the next.
One of the major restraints limiting the growth of generic drugs is stringent regulations, as the FDA examines the accuracy, side effects and other ingredients used in generic drugs. If the manufacturers fails to follow the regulatory guidelines, the drugs are usually recalled. Emerging economies such as India and China hold immense potential for the market growth due to the cost effectiveness of the generic drug in these countries. Purity, potency, stability, and drug release are the crucial factors that determine the quality of generic medications, and these should be controlled within a suitable limit, range, or distribution to achieve the required drug quality. Therefore, approval required for generic drugs due to the stringent governmental regulations, which is expected to obstruct market growth.
Crucial factors accountable for market growth are:
Future of Global Generic Drugs Market
Major companies of the global industry including Abbott Laboratories and Teva Pharmaceutical Industries Ltd. are pointing towards commercial growth by adopting strategies like mergers and acquisitions, heavy investments in the manufacturing facilities that is predictable to flourish the global market growth in next few years. This trend is probable to continue and will augment growth of thetarget industry in the near future. For instance, in August 2016, Teva Pharmaceutical Industries Ltd. acquired Anda, a wholesale distributor of pharmaceutical products in the United States.
COVID-19 to Impact Pharma Supply Chain
As the COVID-19 pandemic continues to spread over the world, the global pharmaceutical supply chain is likely to be jeopardized in the coming months. The pharmaceutical business has been disrupted by widespread city lockdowns in China, as well as ongoing airfreight problems, particularly in countries that rely on Chinese raw supplies. These raw materials are known as Active Pharmaceutical Ingredients (APIs) in the pharmaceutical business, and they are chemical compounds that are used to build a final medication product. The US Food and Medicine Administration (FDA) confirmed the first occurrence of a drug shortage owing to an API manufacturer being affected by the COVID-19 outbreak in China on February 27, 2020, albeit particular facts about the drug in question were not revealed due to confidentiality concerns.
During the COVID-19 epidemic, raw materials were scarce due to manufacturing halts and labor constraints, exposing the pharma industry's reliance on China. The country contributes significantly to worldwide API production and intermediate manufacturing. China accounts for 20% of global API output, according to the World Health Organization, while many healthcare organizations believe the proportion is double. According to the FDA, between 2010 and 2019, the number of registered facilities manufacturing APIs for US pharmaceutical companies in China more than doubled, owing to labor availability and economic benefits.
While Shanghai is home to several large international pharmaceutical businesses including Bristol-Myers Squibb, Roche, and Ajinomoto, Zhejiang province, just south of Shanghai, is home to the most pharmaceutical manufacturing facilities that export to the US and EU markets. The following graph indicates that the FDA has more facilities approved in certain regions than the EU, although both organizations have similar regulatory standards. The claim is consistent with FDA records from August 2019, which claimed that 72% of API manufacturing facilities for the US market were located outside of the country, with 13% in China.
Resuming operations does not always imply a resumption of full production: some companies have reported capacity utilization rates of up to 80%. Raw material supply continues to be limited since suppliers have not yet completely ramped up operations. Furthermore, manufacturers face challenges due to a workforce scarcity, since some employees are still stranded in their hometowns due to travel restrictions between Wuhan and other cities, at least until April 8, when Wuhan is expected to remove its lockdown completely and resume all transit.
COVID-19 Impact on Global Generic Drugs Market
The outburst of COVID-19 has affected most of the world's main markets, generic drugs market is no exception. The Covid-19 pandemic has influenced leading countries across the world including China, India, the U.S., and other nations. Upsurge in the cost of raw materials and drugs owing to supply chain disruption, lockdown situations has affected growth of the generic drugs industry. This is due to; around 13% of brand and generic manufacturers are based in China and 24% of medicines and 31% of medicinal ingredients were imported from India.The pharmaceutical supply chain is easily broken and the impact of Covid-19 has taken it to the fore once again. The API plant for these is often overseas, with India and China dominating the API market. The API can be produced in a single plant and, at each level, has very little inventory. However, COVID-19 is gradually solving the problem, with most businesses starting their facilities at full capacity.
| Report Highlights | Details |
| Market Size in 2023 | USD 464.98 Billion |
| Market Size by 2033 | USD 776.78 Billion |
| Growth Rate from 2024 to 2033 | CAGR of 5.2% |
| Base Year | 2023 |
| Forecast Period | 2024 to 2033 |
| Segments Covered | Drug, Brand, Route of Drug Administration, Therapeutic Application, Distribution Channel |
| Regional Scope | North America, Europe, Asia Pacific, Latin America, Middle East & Africa (MEA) |
Driver:
Rising cases of cancer
Cancer treatment can be prohibitively expensive, especially with the rising costs of branded cancer medications. Generic drugs offer a more affordable alternative to branded counterparts, allowing patients to access essential cancer treatments at lower costs. As the number of cancer cases increases, the demand for cost-effective treatment options also rises, driving the growth of the generic drugs market. Many branded cancer drugs face patent expirations, allowing generic pharmaceutical companies to introduce bioequivalent versions of these medications into the market. Generic versions of cancer drugs can be approved more quickly and at a lower cost compared to the development of new branded drugs. Patent expirations create opportunities for generic manufacturers to enter the market and offer affordable alternatives to branded cancer treatments.
Restraint:
Regulatory hurdles
Generic drug manufacturers often face stringent regulatory requirements and lengthy approval processes before they can bring their products to market. Compliance with regulatory standards imposed by agencies such as the U.S. Food and Drug Administration (FDA) or the European Medicines Agency (EMA) can be costly and time-consuming, delaying market entry for generic drugs.
Patent protection granted to branded drugs can pose a significant barrier to the entry of generic competitors. Pharmaceutical companies invest heavily in research and development to develop new drugs, and patents provide them with exclusive rights to manufacture and sell these drugs for a specified period. Generic manufacturers must wait for patents to expire or challenge them through legal means, which can delay market entry and increase litigation costs.
Opportunity:
Government support for the production of generic medicines
Governments prioritize public health initiatives aimed at improving healthcare access and outcomes for their populations. Generic drugs play a crucial role in addressing public health challenges by providing affordable treatments for chronic conditions, infectious diseases, and other healthcare needs. Government support for generic drugs aligns with public health goals of promoting medication adherence, reducing disease burden, and improving overall health outcomes. Governments establish regulations and approval processes for generic drugs, creating a pathway for their entry into the market. Regulatory agencies, such as the Food and Drug Administration (FDA) in the United States, assess the safety, efficacy, and quality of generic medications, ensuring they meet stringent standards before approval. Government support in the form of clear regulatory guidelines expedites the approval process for generic drugs, facilitating their availability to patients.
The pure generics segment accounted largest revenue share 52.57% in 2023. Emerging markets can be challenging for pharmaceutical companies that are more accustomed to operating in developed markets, but understanding the unique problems these markets present may distinguish winners from losers, especially as the competitive battlefield becomes more global. Emerging markets are home to more than 70% of the world's population, cover 46% of the planet's surface, and generate 31% of global GDP. As a result, they are the industry's next great growth engine.
Branded generics, on the other hand, are given names to increase consumer recognition and loyalty. Cryselle, for example, is a brand-name generic contraceptive pill. To improve the possibility of patients requesting it by name, it is referred to as Cryselle rather than its generic name (norgestrel and ethinyl estradiol). To achieve cost savings, formulary administrators must examine the drugs on their formularies regularly. Branded generics, like generics, offer a cost-effective alternative to branded medications. When it comes to ways that PBMs avoid complete disclosure of their revenues, there is some friction between formulary managers and PBMs. Some pharmacy benefit consultants believe that one of the ways pharmacy benefit managements hide revenue is through branded generics.
Oral formulations account for around 65.33% of the global market share of all pharmaceutical formulations intended for human use, according to current estimates. Orally administered pharmaceuticals account for about 84 percent of the top-selling pharmaceuticals.
According to the World Health Organization, between 2 and 3 million cases of non-melanoma skin cancer and 132,000 cases of melanoma skin cancer are detected each year. Furthermore, the global prevalence of psoriasis ranges from 0.09 percent to 11.43%, making it a severe global disease affecting at least 100 million people. The market for sophisticated topical products is likely to rise in the coming years, as topical drug administration is the first line of treatment for the majority of skin illnesses.
Global Generic Drugs Market, By Route of Administration, 2020-2023 (USD Billion)
| By Route of Administration | 2020 | 2021 | 2022 | 2023 |
| Oral | 257.48 | 272.48 | 287.92 | 303.79 |
| Injection | 82.07 | 87.37 | 92.87 | 98.58 |
| Cutaneous | 30.37 | 32.27 | 34.23 | 36.26 |
| Others | 20.65 | 22.45 | 24.35 | 26.35 |
On the basis of drug type simple generic drugs segment is dominant owing to its low cost over super generic drugs. These drugs also yield the same therapeutic effect and are prescribed in the same dosing, with the same quality, and same the way of consumption and usage. Super generics of drug type segment is expected to hold a share of more than 42.18% by 2030 in the global generic drugs market.
The oncology segment is observed to witness the fastest rate of expansion at a CAGR of 6.6% during the forecast period. Cancer is one of the leading causes of mortality globally, and the demand for effective cancer treatments continues to rise. Oncology drugs are essential for treating various types of cancer, including breast cancer, lung cancer, prostate cancer, leukemia, and lymphoma. As a result, the oncology segment represents a substantial portion of the pharmaceutical market.
The high cost of branded oncology drugs can pose significant financial burdens on healthcare systems, insurers, and patients. Generic oncology drugs offer a more cost-effective alternative, helping to reduce overall healthcare expenditures and improve affordability and access to cancer treatments. As a result, payers and healthcare providers often encourage the use of generic drugs to lower healthcare costs while maintaining treatment quality.
For the better understanding the recent situation of the global generic drugs market and for most policies of the country, Precedence Research forecast the future evolution of the generic drugs industry. This research study offers qualitative and measureable insights on generic drugs market and valuation of market size and development trends for global market segments.
Segments Covered in the Report
By Drug Type
By Brand
By Route of Drug Administration
By Therapeutic Application
By Distribution Channel
By Geography
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