Pharmaceutical Company Revenues worth $60 Billion under Threat from Generic Drugs

28 September 2005

Up to $60 billion of major branded drugs sales are at risk from new generics competition between now and 2009 fueling growth of specialist generic pharmaceutical companies, says a report.

"Generic Competition to 2009 - The impact of patent expiries on sales of major drugs", shows that up to $60 billion of revenues currently generated in Europe and the USA by big pharmaceutical companies could come under threat as patents expire and generic competition kicks in.

The impact of these expiries is not equally spread amongst big pharmacos. "There is a considerable difference between the top 20 pharmaceutical companies in both the number of products and the amount of revenues under threat from the potential introduction of generics", said Dr Peter Norman, the report's author. "Eli Lilly, Schering Plough Bayer, Amgen and Schering AG have little or no threat under current legislation, while GlaxoSmithKline, Pfizer and Roche are most exposed to generic threats in the period 2005 to 2009," he added.

The beneficiaries of this growth are likely to be the major generics companies, in particular Sandoz and Teva. The leading generics companies are likely to remain those based in Europe, especially Germany, and North America, plus those in Israel and India. The near term may also see the emergence of new players from the Far East, especially China and Korea, taking advantage of low cost bases and scientific capabilities.

In 2004 global sales of generic products were reported to be $58 billion accounting for 14% of the global healthcare market. The five year period to 2009 could see $15-$20 billion of additional revenues generated by the generics companies, significantly enhancing their growth prospects.

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