Over the past decade, generics companies have saved the US healthcare system over $1 trillion. Globally, generics companies continue to reduce the cost of medicines while also increasing access to lifesaving medications. This year will be transformational for the generics industry.
Since creating guidelines in 2005, biosimilar approval by the European Medicines Agency has saved Europe $2.2 billion in healthcare costs per year.2 Using the US biosimilar pathway, Sandoz hopes to achieve the first
US FDA biosimilar approval in 2015. By now most generics companies have determined their strategy for the biosimilar market. As we outlined in our 2010 Market Adoption Survey,3 generics companies should define
their strategy in terms of products, partnership, investment, and regulatory analysis. As generics companies struggle to find scientific and technical expertise, and branded companies lack lower cost manufacturing and supply chain capabilities, hybridization will likely continue.
Among M&A in 2014, global capacity, ability to scale, and product portfolio additions were the primary themes. These deals demonstrate the strategic intent as to where companies see their ability to execute and grow– traditional generics, generic biologics, new delivery mechanisms, hybridization, or all of the above. While the mechanics of M&A are not new, the ability for companies
to realize synergies are often suboptimized by inadequately addressing the people and processes impacted. Further, when appropriate TSA measures are not enforced, integration budgets are often inflated. When using M&A to expand your portfolio, due diligence requires particular focus on skills, systems, and regulatory concerns.
Distributor and pharmacy partnerships are reshaping the generic drug distribution channel. These partnerships increase scale and purchasing power, putting pressure on generic manufacturers. Leading generic companies will try to think differently about the market. Value for the pharmacy will become a key differentiator with the growth of specialty pharmacies. Value for the payers will be driven by the quality of healthcare outcomes. Anything that can be done to differentiate using value-added services is going to be a critical strategy to combat volume pressure by the distributor channel. Also the ability to capitalize on generic launches of high-value branded drugs and continued global expansion are key strategies for success.
To read more about the Generics Industry Trends, click on the PDF below.