Generic Industry Is Poised for Double-Digit Growth
The generic drug industry's growth rate is expected to surpass that of the branded industry soon. Fueled by the increasing number of FDA approvals, the generic market will grow by 10% to 15% annually over the next 5 years, the business intelligence firm Cutting Edge Information predicts. The huge growth in the generic industry is the result of 3 factors: (1) the aging of the population needing medication; (2) the current emphasis on reducing drug costs in major markets (ie, United States, Germany, and United Kingdom); and (3) the recent and future patent expiration of branded products that created more than $37 million in sales in 2002 and that will continue to pressure brand drug manufacturers for the remainder of the decade.
These 3 factors are responsible for increasing the percentage of prescriptions filled with generics in the United States from 18.6% in 1984 to almost 50% today. In terms of dollars, US generic sales rose from $12 billion in 2001 to $15.4 billion in 2002. Experts forecast that this figure will jump to $22 billion by 2005 and to $60 billion by 2007.
These figures present good news for consumers. For example, in 2002 filling an average generic prescription cost patients $16.85, versus $72.20 for the average branded prescription.