Paul Thomen

Tuesday, 9 April 2013

World PharmaSphere Generics Strategy Markets 2013

Multinationals Threatening Domestic Growth of India’s Generics Firms, Says GlobalData Report

Previously considered a thorn in the side of Big Pharma, the Indian generics industry is emerging as a key hunting ground for Multinational Corporations (MNCs) looking to extend their reach into emerging economies. Domestic players, however, may pay the price for the intrusion, states the latest report from research and consulting firm GlobalData.

The new report* – the first in the company’s new PharmaSphere series – explains that while the Indian generics industry has witnessed significant growth over the last year, pharmaceutical giants, which are keen to leverage  the nation’s  relatively low cost of production and high quality facilities, may slow the growth of India’s  domestic companies.

Adefemi Adenuga, analyst with GlobalData’s Industry Dynamics Team, says: “Indian generics companies, particularly the smaller ones, do not possess the capabilities to match those of these larger players, and are therefore not able to enjoy the resultant scope and scale economies, which are two key requirements in the price-sensitive generics business.”

Indeed, MNCs are actively positioning themselves to capture a significant portion of the Indian generics market, primarily through authorized generic versions of their off-patent blockbusters. Adenuga states: “The branded generics offered by these large companies may appeal more to the brand-sensitive portion of the Indian population, which now numbers over 1.2 billion, especially if these products are sold at prices that compete well with unbranded pharmaceuticals.”

The GlobalData analyst also believes that the future of the Indian generics market will be shaped by how its government reacts to the current pressure by MNCs regarding the nation’s patent laws. Both Bayer and Novartis have launched strong challenges against India’s compulsory licensing of key drugs over the last 12 months.

“Although the government is currently standing its ground, increasing pressure from Big Pharma may force it to relax some of its more stringent laws to favor foreign companies, considering the economic implications of their presence in the country.

“This will come as a blow to domestic generics manufacturers, who often reap the benefits of compulsory licenses and legal rulings against foreign multinationals.”

PharmaSphere: Global Generics Strategy - Key Drivers, Markets and Trends in 2013 report provides strategic analysis of the global generics industry and discusses key trends, significant M&A deals in 2012, and describes the operations strategy of these companies.

This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts.

- The report identifies the key generic players in various markets, including a special focus on emerging markets such as India, China, Russia, and Brazil.
- Furthermore, it provides detailed analysis of the various generic markets including the US, Europe, APAC, and BRIC.
- The report contains expert insights on the corporate strategies of generic companies seeking competitive advantage in the highly competitive generics industry.

Reasons to buy
- Identify the key generic players in various markets, including the emerging markets such as India, China, Russia, and Brazil
- Analyze and track the strategies that successful generic companies are using to gain share in the increasingly competitive market
- Understand the key drivers and trends in the global generics industry
- Use this information as an independent source for your due diligence and transaction strategy

Table of Content

1 Table of Contents 5
1.1 List of Tables 9
1.2 List of Figures 9
2 Introduction 11
2.1 Report Scope 11
2.2 Upcoming Related Reports 12
2.3 Recently Published Reports 13
3 Generics Industry Dynamics 14
3.1 Generics to the Fore 14
3.1.1 Imminence of the Patent Cliff 14
3.1.2 Rising healthcare expenditures prompts many governments to resort to generics to save costs 19
3.1.3 Focus on emerging markets 20
3.1.4 Generic companies continuously drill holes in Big Pharma's deep pockets 21
4 Strategic Deals Trends 24
4.1 Big Pharma's need to plug its revenue gap 26
4.2 Governments cut healthcare spending as financial austerity spreads globally 26
4.3 Low margins in the generics business necessitate scale economies 26
4.4 Highlighted Deals from 2012 27
4.4.1 Watson Closes $5.5 billion Purchase of Actavis 28
4.4.2 Mylan Enters into Generics Partnership with Pfizer 31
4.4.3 Merck and Supera Farma Laboratórios 35
5 Generics in North America 37
5.1 Overview 37
5.2 United States 38
5.2.1 The US Pharmaceutical Industry 38
5.2.2 Key Players 50
5.2.3 Outlook 51
6 Generics in the Asia-Pacific (APAC) 52
6.1 Overview 52
6.2 Australia: Healthcare Policy Reform and the Generics Business 53
6.2.1 Prescription Drug Regulation and Pricing in Australia 53
6.2.2 The Australian Generics Business Environment 58
6.2.3 Key Players 63
6.2.4 Australia's Healthcare Reform and Impact on the Role of Generics 64
6.3 Japan 67
6.3.1 The Japanese Pharmaceutical Market 67
6.3.2 Perception of Generics in Japan 69
6.3.3 Impact of Pharmacies on Generics Substitution 70
6.3.4 Generics Approval and Market Exclusivity 71
6.3.5 Key Players 72
7 Generics in Europe and Africa 74
7.1 Overview 74
7.2 Europe 75
7.2.1 The Increasing Burden on Healthcare 75
7.2.2 Case Study: Germany 77
7.3 Africa 81
7.3.1 The Need for Local Production 81
7.3.2 Low regulatory compliance and infrastructure result in a weak pharmaceutical industry 82
7.3.3 Low standard of living makes medicines unaffordable, discouraging local players 82
7.3.4 Global organizations and multinationals are standardizing Africa's pharmaceutical space 83
7.3.5 Pharmaceutical Manufacturing Plan for Africa 84
7.3.6 Case Study: South Africa 84
8 Generics in the BRIC Countries 94
8.1 Overview 94
8.2 Brazil 95
8.2.1 Latin America Market Leader 95
8.2.2 Government industrial policies will aid further development of the pharmaceutical industry 96
8.2.3 Generics in Brazil 97
8.2.4 Key Players 99
8.3 Russia 101
8.3.1 The New Federal Law on Health in the Russian Federation 101
8.3.2 Pharma 2020 will further encourage domestic production in Russia 103
8.3.3 Healthy financial situation places less pressure on the Russian government to reduce healthcare costs 103
8.3.4 Key Player 104
8.4 India 105
8.4.1 Absence of product patents before 2005 triggered the birth of the Indian generics market 105
8.4.2 Quality manufacturing facilities create an ideal environment for generics to thrive 106
8.4.3 Inter-firm competition enables capabilities development 107
8.4.4 Policies and initiatives encourage participation in generics manufacturing by driving demand 107
8.4.5 Increased competition from larger multinationals may stymie the development of smaller domestic players 108
8.4.6 Growing pressures on patent laws could challenge domestic generics manufacturers 109
8.4.7 Key Market Players 110
8.4.8 Outlook 113
8.5 China 115
8.5.1 Parallel demographics presents different scenarios on China's pharmaceutical industry 115
8.5.2 A dysfunctional healthcare system provides little incentive for generics substitution 116
8.5.3 Soaring healthcare expenditures pressure China's financial stability 117
8.5.4 Healthcare reform will level the pharmaceutical industry playing field and foster the growth of the generics sector 118
8.5.5 Key Players 119
8.5.6 Market Outlook 120
9 Strategic Outlook 121
9.1 Patent expiries and evolution of the regulatory landscape fuel generics 121
9.1.1 US patent expiry wave presents a unique opportunity for generic manufacturers 121
9.1.2 Government reforms will continue to facilitate generic prescribing 122
9.1.3 Consolidation sweeps through the generics sector 122
9.1.4 India's generic companies are an emerging force in the global generics market 123
10 Appendix 124
10.1 Bibliography 124
10.2 Abbreviations 132
10.3 Research Methodology 137
10.3.1 Coverage 137
10.3.2 Secondary Research 138
10.3.3 Expert Panel Validation 138
10.4 About the Authors 138
10.4.1 Analyst 138
10.4.2 Director of Healthcare Industry Dynamics 139
10.4.3 Global Head of Healthcare Research and Consulting 139
10.5 About the Industry Dynamics Team 140
10.6 About GlobalData 140
10.7 Contact Us 141
10.8 Disclosure Information 141
10.9 Disclaimer 141

For more details contact Mr. Priyank Tiwari: / +18883915441

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