Table of Contents

Generics Series: Generics Trends in the Seven Major Markets and Beyond - The global generics market is growing, however competitive pressures in the more mature markets, and challenging market conditions in immature ones, are pushing industry players to adopt novel and more aggressive strategies to sustain growth.

Product Code: dmhc2468

Publication Date: 11-Dec-2008

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Overview

Introduction

Based on generics use, the seven major markets may be divided into mature (the US, Germany and the UK) and immature (France, Italy, Spain and Japan) markets, both of which present different challenges, making the fast-growing, high-value emerging markets a tantalizing prospect. In addition to market expansion, acquisition and closer innovator ties represent key strategies for industry growth.

Scope

· An overview of key events which have impacted on the generics industry in the seven major markets.

· An insight into the strategic trends employed by the industry to sustain growth in an increasingly competitive environment.

· An introduction to the emerging markets, as the next frontier for industry growth.

· An outline of how recent M&A activity has altered the generics industry landscape.

Highlights

The global generics market is growing, however it will be the immature and emerging generics markets which will increasingly drive growth, as competitive pressures in the more mature markets intensify, and make sustaining revenue growth more difficult here.

Consolidation continues to be a crucial strategy for generics industry growth, with recent M&A activity having reinforced the position of some companies, whilst bolstering the ranking of others. The magnitude of acquisitions has also increased, and given current economic conditions, such high price-tags may not be sustainable.

The increasingly close relationship between generics and branded companiesfeared by regulators to delay generics market entry in some caseshas reached an extreme in the recent acquisitions of generics companies by innovators, a response to the pressures the latter are under.

Reasons to Purchase

· Identify the issues are impacting on the generics industry in the seven major markets.

· Understand why the emerging markets are increasingly a target for generics companies.

· Identify the key strategic trends for the generics industry in the future.

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CHAPTER 1 EXECUTIVE SUMMARY	4
Scope of the report	4
Key findings	5
CHAPTER 2 TRENDS IN THE GENERICS MARKET	11
Consolidation - size, spread, and (drug) supply	12
Acquisition of Barr allows Teva to extend its lead	13
Mylan still assimilating Merck Generics acquisition	14
Acquisitions to come	16
Sandoz - time for another major acquisition?	16
Mylan - a ticket to the top five?	16
Actavis - up for sale?	17
Convergence between generics companies and innovators	18
Daiichi Sankyo's acquisition of Ranbaxy	19
Pfizer moves beyond own-generics	20
Sanofi-Aventis bags Zentiva	20
GlaxoSmithKline inching into emerging markets via generics	22
Innovator-generic company deals under increasing scrutiny	23
Reverse payments in US	23
Shift in form of compensation offered by branded companies	24
Little opposition to reverse payments	26
EU Commission undertakes dawn raids, to gather settlement data	28
Resistors to generics market entry in the pharmaceutical sector	29
CHAPTER 3 THE MATURE GENERICS MARKETS	38
The US market - reaching the outer limits of growth	39
Wal-Mart reinforces its position in the generics prescription market by targeting the mail order pharmacy sector	40
Generics drive from insurers and PBMs	41
Insurers offer physician rewards to up generics prescription	41
PBMs get personal	42
ANDA approval times on the increase	42
Generic erosion in the US	43
Protonix loses 75% market share within two quarters of generic entry	44
Fosamax lost 75% market share in two quarters	44
Germany - on the road to becoming a commodity market	46
AOK relaunches more competitive drug tenders	46
DAK tenders under scrutiny	47
The UK - reimbursement changes will impact on generics use	48
Mandatory pharmacist substitution to be introduced	48
CHAPTER 4 THE IMMATURE GENERICS MARKETS OF EUROPE	50
Italy experiences setback following bioequivalence issues	51
Spain remains a tough market	51
Teva expands presence in Spain through Bentley acquisition	52
Zydus Cadila moves into Spain	53
France - generics use driven by state and pharmacists	53
Generics penetration has increased for a subset of drugs	53
Pharmacists are driving generics use	55
Wholesaler discounts larger for generics	56
Reference pricing has contributed to growth in generics use	57
CHAPTER 5 JAPAN POISED FOR GROWTH	58
Japan's generics market - international interest mounting	58
Reforms to promote generics use	59
Impact of new form prescriptions	60
Quality over price	62
Amlodipine generics show disappointing uptake	62
Quality control for generics	63
Improving generics distribution should promote uptake	64
Boost to cardiovascular drug generic switch	65
Impact of the generics drive	65
Influx of multinationals as Japanese generics market looks set to grow	66
Teva beefs up Japanese presence with domestic support	67
Mylan to expand in Japan	67
Actavis to expand in Japan	68
Indian companies make bid for Japan	68
CHAPTER 6 EMERGING MARKETS ARE THE NEXT FRONTIER	70
Growth opportunities in emerging markets	72
Central and Eastern Europe - the time to enter is now	74
Latin America - generics use to continue to grow	75
Asia - driving growth of the pharma industry in the future, but unlikely to be a goldmine for generics	76
India - low value high volume market	77
China - a tough generics market to enter, for little reward	77
Middle East and North Africa - easy pickings for foreign entrants?	79
Companies looking to enter emerging markets	80
Teva looking east	81
Sandoz's growth driven by emerging markets	81
Mylan looking to be a top three player in CEE	82
Stada establishing itself through a combination of organic and inorganic growth	83
Actavis has acquired its way into emerging markets	83
Indian generics companies continue to expand aggressively	84
The consequences of India's reliance on Chinese APIs and intermediates	86
Ranbaxy falls foul of FDA	87
CHAPTER 7 BIBLIOGRAPHY	89
Publications and online articles	89
Conference literature	100
Datamonitor resources	100
APPENDIX	102
List of Tables
Table 1: Zentiva's ranking in Central and Eastern Europe, 2006-07	22
Table 2: Generics market in France, 2007	54
Table 3: Generics chosen for quality checking, Japan, 2007	63
Table 4: Exchange rates, 2007	104
List of Figures
Figure 1: Overview of the key trends and events in the global generics market	5
Figure 2: Key trends across the generics industry, 2008	11
Figure 3: Global generics company ranking, 2007	12
Figure 4: Generic erosion of Duoneb revenues in the US, 2007	15
Figure 5: Branded-generic final settlements in the US, FY 2004-07	24
Figure 6: Number of settlements between branded and generics companies in the US, FY 2007	25
Figure 7: Innovator strategies which delay generic entry	30
Figure 8: Agreements between branded and generics companies in the EU, 2000 -08	34
Figure 9: Authorized generic agreements in the EU, 2000-07	36
Figure 10: The mature generics markets - the US, UK and Germany	39
Figure 11: Generic erosion of Protonix sales in the US, 2007-08	44
Figure 12: Fosamax sales erosion in the US, 2007-08	45
Figure 13: Drivers and resistors of generics use in Italy, Spain and France, 2008	50
Figure 14: Pharmaceutical distribution channels in France	56
Figure 15: Wholesaler mark-ups and pharmacy margins in France	57
Figure 16: The Japanese generics market, 2008	58
Figure 17: Market dynamics for first generic to market	70
Figure 18: Drivers and resistors of expansion into emerging markets	72
Figure 19: Generics market size and growth, 2003-06	73
Figure 20: Sandoz's leading position in Central and Eastern Europe, 2007	82
Figure 21: Major acquisitions by Indian generics companies, 2003-07	85
Figure 22: GMP deficiencies in two of Ranbaxy's Indian plants	87

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