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Mini–Review Article

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Advances in Pharmaceutical and Ethnomedicines. 2 (2): 18 – 20  


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Pharmaceutical Industry Challenges and Generic vs. Patent Brands, Global Perspective

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<strong>Muhammad Irfan Akram </strong><span><sup></sup></span> 


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Pharmaceutical Marketer (Head of Sales and Marketing Agror Pharma Private Limited) Lead Consultant–Pakistan 

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<p><span class="Author">*Corresponding author:irfanpharmacist@hotmail.com</span></p>

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<div id="ColorID"><p>
<span><b>ARTICLE CITATION:</b></span> 

Akram MI (2014). Pharmaceutical industry challenges and generic vs. patent brands, global perspective. Adv. Pharm. Ethnomed. 2 (2): 18 – 20.


<br>
<span><b>Received: </b></span>2014–03–20, <span><b>Revised: </b></span>2014–04–02, <span><b>Accepted: </b></span>2014–04–03<br>

The electronic version of this article is the complete one and can be found online at 

(<a href="http://dx.doi.org/10.14737/journal.ape/2014/2.2.18.20">

http://dx.doi.org/10.14737/journal.ape/2014/2.2.18.20

</a>)
which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited </p>
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     <h3 class="Hdr3">ABSTRACT</h3>

    <p>
    Pharmaceutical industry is the main pillar of Health Sector in terms of business volume.  Global spending on medicines will exceeds 1 Trillion US$ in 2014 claimed by IMS health (Original name was “Intercontinental Marketing Services”)3. The US, EU5 (combine of Germany, France, Italy, UK & Spain), Japan and China will accounts for 67% of the total Global medicine spending. Total Global spending on Generics will increase from 27% in 2012 to 36% in 2017; however it accounts 63% in Pharmerging markets (China, India, and Israel etc)3. Developed markets of North America, Europe and Japan sees limited single digit growth–spending mainly due to economic health policies and  measures  taken  by  regulatory  authorities  to  encourage  the  use  of  cheaper  and  economical medicines. Pharmerging markets showed double digit spending growth mainly due to increase in health coverage, economic growth and demographic changes.  Uncertainty exists in developed markets to a greater extent.  Use  and  access  to  innovative  medicines  is  very  restricted  even  in European countries most of the people have very limited access to these innovative medicines. Affordable Care Act.  Imposed by US Govt.  brings uncertainty  as  it enrolls  many  uninsured persons,  to  the  speed  of  payment  system changes and shift in the service delivery  including negotiations between payers and service providers.
    </p>
 
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    <p>
    Two factors would be the major drivers of growth of pharmaceutical industry in coming years, increased spending on medicines in emerging markets and increased spending on new drugs for cancer and orphan diseases.
Use of medicines is complex phenomenon and  varies  among  geographic segments (developed countries vs. under–developed countries, regulatory authorities of individual countries, patent laws and  Trade  related  intellectual  proprietary  rights–TRIPS)  and  demographic  segments  (age, sex, lifestyle and congeniality etc.).
</p>

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<div class="pt" > <a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig1_381.PNG" target="new"><img class="img_display" src="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig1_381.PNG" width="80" height="80"></a>
<p class="Txt_Dis" ><span><b><a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig1_381.PNG" target="new"> </a></b><a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig1_381.PNG"><span>Geographic distribution of medicine spending; Source: IMS Health Market Prognosis 2013</a></p>
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<p>
Pharmaceutical industry on basis of products, can be divided into,</p><p>
1.	Research based drug molecules manufacturers </p><p>
2.	Generics medicines manufacturers – Low cost medicines</p><p>
Companies spend millions of $ on Research & Development and later on only few molecules can reach to Phase 3 clinical trials and finally they get approval from regulatory authorities to market only  one  to  two  molecules  those  which  have  been  found  safe  and  effective  in  large  human population. Mostly research medicines got respectable business across the World to surpass their original research cost within few years of market launch. If we see the whole phenomenon of a Research Brand from Development to Production (Formulation) to Distribution to Market, huge cost is involved. Usually companies spend large budgets on promotion of research brands to not only gain market share but also establish their brand loyalty to develop threats for low cost generics to enter into market.  Pharmaceutical companies’ mergers and acquisitions in past 5 years were tremendous  on  the  edge to  curtail their  expenses  to  meet  the  global  economic recession  and maintain their viability.  Another reason of these mergers is due to dropping off patents of many blockbuster brands and increasing growth trend of ‘generic market’ that caused significant drop off revenues, so this is the only reason that most of the MNCs also entered into ‘generic medicines’ business. According to the Department of Commerce, there has been increased globalization in both brand name and generic drugs over the last two decades.  India, China, and Israel do the most manufacturing of generics, and the fastest–growing pharmaceutical manufacturing centers are in South Korea, Brazil, the Middle East, Russia, and Southeast Asia. The Department of Commerce reports that Australia, France, Greece, Japan, and Switzerland have generic–drug utilization rates below 30%, in contrast to the U.S. rate of 86%2.  Research suggests that foreign governments’ price controls  have  delayed  the  launch  of  drugs  in  different  markets,  thereby  adversely  affecting patients’ access to new medications.  In 2013 and 2014, 14 and 18 drugs will come off patent, respectively; in 2015, only nine drugs will lose their patents. After 2015, very few breakthrough drugs will be coming off patent, so manufacturers of generic drugs will encounter a slower growth in revenue.
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<div class="pt" > <a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig2_381.PNG" target="new"><img class="img_display" src="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig2_381.PNG" width="80" height="80"></a>
<p class="Txt_Dis" ><span><b><a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig2_381.PNG" target="new"> </a></b><a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig2_381.PNG"><span>Source: World Bank, 2012; IMS Health Market Prognosis, September 2013; Medicine spending per capita and growth rates are starkly different between high income countries and those with mean income under $25, 000 per capita</a></p>
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<p></p>

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<div class="pt" > <a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig3_381.PNG" target="new"><img class="img_display" src="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig3_381.PNG" width="80" height="80"></a>
<p class="Txt_Dis" ><span><b><a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig3_381.PNG" target="new"> </a></b><a href="http://nexusacademicpublishers.com/uploads/imagesfiles/Fig3_381.PNG"><span>Generics volume share of unprotected European market by country</a></p>
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<p>
The  German  generics  market  had  total  revenues  of  $9.2bn  in  2012,  representing  a  compound annual growth rate (CAGR) of 0.8% between 2008 and 2012.  The performance of the market is forecast to accelerate, with an anticipated CAGR of 2.7% for the five–year period 2012 – 2017, which is expected to drive the market to a value of $10.5bn by the end of 20171.
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<ol type="a">
<li><p>The mix of total global spending on medicines will shift toward generics over the next five years, rising from 27% to 36% of the total by 2017, even as brands will continue to account for more than two thirds of spending in developed markets.</p> </li>

<li><p>The use of generics will be at its highest in pharmerging markets where 63% of the spending will go to generic products.</p></li>
<li><p>Absolute spending on brands in developed markets will decline by $113bn over the next five years due to losses of exclusivity, slower uptake of new medicines and more restrictive access approaches.</p></li>
<li><p>Traditional pharmaceuticals – typically used to treat chronic diseases in primary care – will increasingly be dispensed as generics and as a result total spending will only rise 5% by 2017 in developed countries.</p></li>
<li><p>Conversely,  patients  in  pharmerging  markets  will  increasingly  have  access  to  affordable generics for primary care treatments and total spending on traditional pharmaceuticals in  these markets is expected to rise from $199Bn in 2012 to $336Bn in 20173.</p></li>
<li><p>Specialty medicines – used for conditions that require complex treatment and usually command higher prices –will be the biggest driver of branded drug spend growth and most apparent in developed markets where spending is expected to increase by 30% over the next five years.</p></li>
<li><p>Use  of  specialty  medicines  in  pharmerging  markets  is  at  very  low  levels,  but  the  costs  areexpected to rise by nearly 90% between 2012 and 2017.</p></li>


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<h3 class="Hdr3">REFERENCES</h3>


 <p class="p2"> <a name="Carswell2010"></a>
http://www.marketresearch.com/MarketLine-v3883/Generics-Germany-7758775
 </p>

<p class="p2"> <a name="Somnath2013"></a>
Somnath Pal; US Pharm. 2013; 38(6) (Generic Drug Review suppl): 6 – 10.
</p>

<p class="p2"> <a name="Carswell2010"></a>
The Global Use of Medicines: Outlook through 2017. Report by the IMS Institute for Healthcare Informatics. www.theimsinstitute.org
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