The European generics market is expected to boom to $35.9bn (€26.1bn) in 2013, according to a Frost & Sullivan report
Europe is emerging as a key market for pharmaceutical industry. The markets have high potential for generic penetration. The top players control a significant part of it. The four largest markets are Germany, France, the UK and Italy which account for over 50 per cent of the European Union (EU) population.
Size of Market in Billion
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Indian companies are entering the European market e.g. Dr. Reddy’s has acquired Betapharm in Germany, Ranbaxy has bought RPG Aventis in France and Terapia in Romania, and Matrix Laboratories has taken over Belgium’s second largest generics player DocPharma
The generic drug sector in Europe is poised for significant market growth over the next five years. Already generics account for 50% of all prescriptions and this is forecast to reach 75% by the end of 2007.
Cost-containment pressures on healthcare services and organizations will lead to increased adoption of generic substitution and prescribing practices in many EU Member States boosting volume and value for the industry. Other factors such as patent expiry of leading drugs and EU enlargement are intrinsic in the growth and expansion of the EU generics sector to 2007.
Countries such as Germany and the UK continue to dominate the European generics sector, but Southern Mediterranean countries such as Spain and Italy who have had low value and volume generic markets are forecast to increase rapidly mainly as a result of government cost-containment pressures. The Dutch and Scandinavian markets are also expected to show sustained growth in line with growth of total markets and positive disposition towards generics.
The last few years have seen a rapid growth in the European generics market, the combined result of governments' efforts to encourage the use of generics in a bid to reduce prescription costs and the number of drugs coming off patent.
The most lucrative area for the generic market was ethical generic sales, which contributed approximately 83.3% to the total generic market. OTC generics accounted for the remaining 16.7%. The main barriers to OTC generics growth are the dominant position of brand name drugs, and the lack of knowledge of the availability and effectiveness of generic alternatives.
With the rise of pricing pressure in the US generic market, the focus of Indian firms are now turning towards European generics market and the focus on European generic markets will increase in the future.
Market penetration for generic medicines varies between different countries in Europe. While in Germany, the UK and the Netherlands, generic medicines are already widely prescribed, there is still great scope for expansion in other states, notably Italy, Spain and France. These countries are expected to be a major target for generics producers in the next two to five years.