By 2030, generics manufacturers will need to shift from the status quo and explore one of three avenues for change.
The generics industry faces two opposing forces that complicate profitability and growth.
On the one hand, demand for generics continues to rise. In 2019, patent expiries totaling nearly $8 billion in U.S. annual sales opened up substantial opportunities for creating generic counterparts. A significant number of additional expirations are expected in the next five years.
At the same time, the industry is grappling with unstable economics and disruptions to the supply chain. Although most generics players outsource manufacturing to less expensive markets to remain profitable, offshore manufacturing raises quality issues and other risks.
The intersection of opportunities and challenges can create a vicious cycle:
And so, the cycle continues. Generics manufacturers have an opportunity to break this cycle by pursuing one or more of the three scenarios for change we present in our recent thought leadership – Generics 2030: Three strategies to curb the downward spiral. In short, these strategies are: