Government initiatives to cut health expenditure are likely to encourage sales of generic medications in Europe, according to a new report by healthcare experts GBI Research.
The new report* predicts an increase in revenue made by generics in the region during the next five years, as cost-containment policies strongly support the consumption of generic drugs over innovative drug use.
Biosimilars are a category of generics, also referred to as generic biotech Active Pharmaceutical Ingredients (API), or follow-on biologics (FOB). API derived from biotechnology provide high-growth market potential, but are expensive to develop and manufacture compared to the production of regular small molecule generic API.
France, Germany and the UK have all tightened their healthcare budgets to tackle the economic crisis, resulting in pressure to reduce pharmaceutical prices. This is bringing about changes in healthcare pricing and reimbursement across the continent. Reimbursement restrictions are applied to drugs that are priced higher than the reference price, and will restrict the growth of the innovative and biologic API markets during the next few years.
However, while reimbursement cuts are expected to decrease the use of innovative, drugs and hinder API revenue, luckily API generics look set to remain popular.
The expiry of patents for major blockbuster drugs and the entry of low-priced generic versions are expected to increase the consumption of generic drugs, with the weak pipelines of major pharmaceutical companies amplifying this trend. With many patent expiries occurring during 2010-2012, generic consumption is expected to peak, and in turn increase the competition between pharmaceutical producers.
The European API market accounted for around 24.2% of the global API market revenue of $108.6 billion in 2011. Germany and France were the market leaders, with Italy and the UK trailing in third and fourth.
The remaining shares of the market depict the emergence of contract manufacturing organization (CMO) activity and improvement in GDP in Central and Eastern European economies, which have driven up the health care market during recent years. Most Eastern European countries possess good business infrastructure and offer excellent business opportunities for API manufacturing, which is expected to drive the API CMO market in the region during the forecast period. According to GBI Research estimates, the overall CMO market in Eastern and Central Europe countries is expected to witness a healthy CAGR of 14.1% to 2017. This increase in CMO activity is expected to capture most of the API manufacturing activity towards 2017.
The API market in Europe accounted for revenue of $19,868.39m in 2005, which grew at a CAGR of 4.8% to $26 billion in 2011. The market is expected to grow further at a CAGR of 6.5% to reach $38 billion by 2017. This will be supported by healthy demand from the generic and biotech API sectors.
NOTES TO EDITORS
This report provides detailed insight into the Europe API market, and presents detailed analysis and forecasts of the major economic and market trends affecting the API markets in this region. The report contains market forecasts, product type analysis, drivers and restraints. In addition, it includes market forecasts, product type analysis, therapeutic categories analysis and CMO growth in the region and its influence on API manufacturing activity towards 2017. Overall, the report presents a comprehensive analysis of the Europe API market, covering all the major parameters.
This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts.
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