Generic Drugs Market Size to Worth Around USD 779.68 Bn by 2033

A recent market report published by nova one advisor, the global generic drugs market size was estimated at USD 465.19 billion in 2023 and is expected to be worth around USD 779.68 billion by 2033 with a CAGR of 5.3% from 2024 to 2033.

The generic drugs market grows due to their cost-saving potential and essential role in reducing healthcare expenditure. Generic drugs, identical to brand-name counterparts, undergo FDA review for bioequivalence through abbreviated new drug applications (ANDAs). Their lower prices stem from avoiding costs related to drug discovery and clinical trials. As healthcare costs rise globally, the affordability of drugs becomes paramount. With more patents expiring, the generic drugs market is set for continued growth.

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Market Overview

The rapid growth of the generic drugs market is driven by their equivalence to brand-name medications, offering identical dosage forms, safety, effectiveness, and intended use. Generic drugs undergo rigorous FDA review to ensure bioequivalence, providing the same clinical benefit as their branded counterparts. With the same active ingredients and manufacturing standards as brand-name products, generics offer comparable risks and benefits while typically being sold at significant discounts—up to 80 to 85% less than brand-name medicines. This cost reduction is facilitated by avoiding upfront research costs, as generics are approved after the exclusivity period of the brand product’s patent expires. The widespread availability and affordability of generic drugs contribute significantly to the growth and accessibility of healthcare worldwide.

• In May 2023, Ginkgo Bioworks and Centrient Pharmaceuticals announced the expansion of their partnership following the success of an initial project to bring sustainable innovation to the generic API space.
• In August 2022, Novartis announced its intention to separate the Sandoz business to create a standalone company by way of a 100% spin-off.

Key Takeaways:

• North America led the global market with the highest market share of 34.69% in 2023.
• By brand, the pure generics segment has held the largest market share of 52.59% in 2023.
• By route of administration, the oral segment captured the biggest revenue share of 65.33% in 2023.
• By drug type, the simple generic segment is estimated to hold the highest market share of 60.74% in 2023.
• By therapeutic application, the oncology segment is expected to grow at a remarkable CAGR of 6.6% during the forecast period.

Generic Drugs Market in the U.S. 2024 to 2033

The U.S. generic drugs market was valued at USD 133.85 billion in 2023, and is projected to reach USD 190.64 billion by 2033, growing at a CAGR of 3.6% from 2024 to 2033.

North America led the global market with the highest market share of 34.69% in 2023,driven by the widespread adoption of generics in the United States. With generics representing 90 percent of prescriptions dispensed but only 17.5 percent of total drug costs in the U.S., they play a crucial role in the country’s healthcare system. The rigorous testing conducted by the FDA ensures that all generics are equivalent to their brand-name counterparts in terms of active ingredients, strength, and dosage. Approximately 91% of prescriptions dispensed in the U.S. are generic drugs, highlighting their importance in providing high-quality and affordable medications to the public. The FDA’s Office of Generic Drugs (OGD) plays a pivotal role in evaluating generic drugs, further ensuring the availability of safe and cost-effective treatment options for patients.

• In 2022, OGD had a highly productive year, engaging in work related to the reauthorization of Congressional legislation, approving numerous generic drugs, including complex generics, and expanding international collaborations.

Health Canada evaluates generic drugs for safety, effectiveness, and quality, aligning with international regulatory standards. Continuous improvement ensures adherence to evolving approval criteria, fostering confidence in generic medications.

• In October 2023, the pCPA and the Canadian Generic Pharmaceutical Association (CGPA) reached a new three-year pricing initiative for generic drugs, with the possibility of extending it by an additional two years. Québec was also included as a participant in the renewed agreement.

The growth in the Asia-Pacific (APAC) region is driven by the rapid increase in chronic diseases due to lifestyle changes, fueling demand for generic drugs. In India, a key player in affordable generic medications, potential challenges arise from proposed trade deals that could hinder cost-effective drug production. The Indian pharmaceutical sector, known for its avoidance of costly research, may face pressures to conduct expensive trials under new proposals, risking patient safety. In China, despite efforts to promote consistency in generic drug evaluation, issues persist, with a significant portion of drugs being generic and varying in quality. The focus on policy and technology assessment aims to address these challenges and enhance drug evaluation standards.

• North America contributed revenue of around USD 161.29 billion in 2023 and registered a CAGR of 3.7% from 2024 to 2033.
• The Asia Pacific was valued at USD 104.96 billion in 2023 and growing at a CAGR of 8% over the forecast period 2024 to 2033.
• Europe generated revenue of USD 118.09 billion in 2023 and registered a CAGR of 4.5% between 2024 and 2033.

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By Brand

The pure generics segment has held the largest market share of 52.59% in 2023, with supply increasingly consolidated among a few major manufacturers. These companies possess both the manufacturing capacity to serve low- and middle-income markets and the research and development expertise to tailor generic versions to local needs. Generic manufacturers are responsible for meeting FDA approval requirements and producing approved products, with limited negotiations on rebates with pharmacy benefit managers (PBMs) and health plans.

Branded generics differentiate themselves through proprietary market names, enhancing consumer recognition and loyalty. Unlike ordinary generics identified by chemical names, branded generics adopt unique names to mimic branded drugs’ marketing strategies. For instance, Cryselle, a contraceptive pill, exemplifies this approach. These products may also serve as novel dosage forms of off-patent drugs, addressing dosage gaps while offering consumers memorable names. This branding strategy fosters consumer trust and preference, akin to branded medications, within the generic drug market.

By Route of Administration

Oral formulations account for around 65.33% of the global market share, representing the most preferred route for drug administration due to its non-invasiveness, patient compliance, and convenience. Factors influencing oral drug absorption, such as solubility and mucosal permeability, are critical considerations. Efforts to enhance oral drug absorption focus on overcoming barriers like physicochemical and biological limitations, utilizing various pharmaceutical technologies and delivery systems such as nanocarriers and lipid-based carriers. These innovations aim to improve drug bioavailability, ensuring effective and efficient oral drug delivery.

Global Generic Drugs Market, By Route of Administration, 2020-2023 (USD Billion)

By Drug Type

The simple generic segment is estimated to hold the highest market share of 60.74% in 2023., offering cost-effective alternatives to brand-name medications. Manufacturers of generic drugs typically incur lower costs as they bypass research and development expenses and the purchase of selling rights. Despite the reduced investment, generic medicines deliver comparable therapeutic effects to their brand-name counterparts. This affordability is attributed to the streamlined development and marketing processes, making generic options appealing for both consumers and healthcare systems.

By Therapeutic Application

The oncology segment is expected to grow at a remarkable CAGR of 6.6% during the forecast period, with generic drugs playing a vital role due to their availability for certain anticancer treatments. Generic medications are crucial for treating conditions like acute lymphoblastic leukemia and early-stage breast cancer, offering cost-effective options for both treatment and supportive care.

Non-proprietary anticancer agents, including generics and biosimilars, often come at significantly lower costs than branded counterparts, reducing overall treatment expenses. Additionally, their multiple-source origin ensures consistent availability. The widespread use of generics and biosimilars relies on their guaranteed quality and pharmaceutical integrity, providing assurance comparable to innovator drugs.

Recent Developments

• In March 2019, Allergan acquired Envy Medical, a biotechnology company providing dermatology and medical aesthetics solutions
• In September 2018, Allergan acquired Bonti Endurance Biotech, a biotechnology company based in Orange, California.
• In 2018, Allergan has acquired Elastagen a leading player. This is order to increase the product portfolio which helps to maintain skin’s elasticity.

Generic Drugs Market Companies

• Mylan N.V.
• Abbott Laboratories
• ALLERGAN
• Teva Pharmaceutical Industries Ltd.
• Eli Lilly and Company
• STADA Arzneimittel AG
• GlaxoSmithKline Plc.
• Baxter International Inc.
• Pfizer Inc.
• Sandoz International GmbH

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

This report forecasts revenue growth at country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the Generic Drugs market.

By Drug Type

• Simple Generics
• Super Generics

By Brand

• Pure generic drugs
• Branded generic drugs

By Route of Drug Administration

• Oral
• Injection
• Cutaneous
• Others

By Therapeutic Application

• Central Nervous System (CNS)
• Cardiovascular
• Infectious Diseases
• Musculoskeletal Diseases
• Respiratory
• Oncology
• Others

By Distribution Channel

• Retail Pharmacy
• Hospital Pharmacy
• Online and Others

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)

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