Visiongain. -v1531/ Publisher Sample

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1 Visiongain -v1531/ Publisher Sample Phone: (US) or or (Int'l) Hours: Monday - Thursday: 5:30am - 6:30pm EST Fridays: 5:30am - 5:30pm EST customerservice@marketresearch.com MarketResearch.com

2 Table 5.6 German Generic Drugs Market: Generic Penetration by Value (%), Generic penetration by proportion of total pharmaceutical sales (%) ; Gesund-heits-bericht-erstat-tung des Bundes (Federal Health Monitoring System, Germany) ( figures). The 2013 and 2014 figures are visiongain s estimates. Figure 5.8 German Generic Drugs Market: Generic Penetration by Value (%), Generic penetration by proportion of total pharmaceutical sales (%) 40 Generic Penetration by proportion of total pharmaceutical sales (%) ; Gesund-heits-bericht-erstat-tung des Bundes (Federal Health Monitoring System, Germany) ( figures). The 2013 and 2014 figures are visiongain s estimates.. Page 98

3 Table 5.7 The French Generic Drugs Market: Market Forecast ($bn, AGR%, CAGR%), France ($bn) AGR (%) CAGR (%) CAGR (%) Figure 5.9 The French Generic Drugs Market: Market Forecast ($bn, AGR%), Market Size ($bn) AGR (%) Market Size ($bn) AGR (%) French Generic Drugs Market: Generic Penetration by Volume, Table 5.8 and Figure 5.10 show the trend in generic penetration by volume of filled prescriptions in France from 2000 to Generic penetration in this developing market continues to increase largely as a result of generic substitution by pharmacies. Page 101

4 Figure 8.4 Novartis: Historical Generic Drugs Sales ($bn, AGR %), Sales ($bn) Novartis Generics Sales ($bn) AGR (%) AGR (%) Source: Novartis 2015; Visiongain Novartis Generic Drugs Sales Forecast Loss of exclusivity and increased competition for its generics were among the factors that affected Novartis and caused a revenue decline of 8.1% for its Sandoz business in Declining sales in major markets such as the US and Germany acted as a catalyst for revenue decline in that year. However since 2012, Novartis has experience sustained growth in its generics business. US retail generics and biosimilars sales for the company was reported to have grown in 2014, driven by the launch of the generic version of Diovan monotherapy, as well as by increasing sales of biosimilar and oncology injectable products, which was partly offset by the effect of customer consolidation. Visiongain expects sales growth to continue in 2015 and beyond, driven by Novartis strengths in the manufacturing of differentiated generics (more specialised or complex products which are harder to manufacture) and biosimilars, where it is considered the global market leader, as well as strong growth in other European markets and in the emerging markets of the Asia-Pacific, Russia and Brazil. Revenues from recently-launched generics of Novartis s own drugs Diovan (valsartan), Lipitor (atorvastatin, Pfizer) and Imitrex (sumatriptan, GSK), as well as its 2012 acquisition of dermatology generics company Fougera Pharmaceuticals, will also contribute. Page 168

5 Sales growth is expected for Abbott s branded generics in the second half of the forecast period too. We expect the acquisition of CFR Pharmaceuticals to add up to $800m to Abbott s annual sales. As new products are marketed either organically or through acquisitions, we predict that Abbott will manage to maintain its prominence in the global market for generic drugs. Table 8.19 and Figure 8.13 show visiongain s forecast of Abbott s generic drugs revenue through to Table 8.19 Abbott: Generic Drugs Revenue Forecast ($bn, AGR%, CAGR%), Abbott ($bn) AGR (%) CAGR (%) CAGR (%) Figure 8.13 Abbott: Generic Drugs Revenue Forecast ($bn, AGR%), Abbott ($bn) AGR (%) Revenue ($bn) AGR (%) Page 192

6 9.3.1 Power Of Buyers Power of buyers Medium Generic drugs are generally sold to distributors (wholesalers). This is particularly true for generic drugs sold in the US. Other buyers of generics include direct sales to pharmacies, hospitals, and individuals consumers. We note that in the US and Europe particularly, distributors have been consolidating and the largest distributors have a disproportionately large market share. Generic drug prices are likely to continue to decrease during the forecast period as a result of increasing competition among manufacturers and the ability of large pharmacy chains and retailers to offer generic drugs at lower prices than before. Some reports indicate that profit margins on generic drugs have fallen from around 25% (double that of large oil companies) to around 5%. Visiongain notes that the US market has a relatively large number of competing manufacturers compared to the leading European national markets. At the same time, the purchasing power of retailers such as Kmart, Wal-Mart and Target has allowed them to buy generics in large volume and offer monthly deals to consumers. In some cases this occurs as part of a loss-leader strategy, with generics priced at or below cost price to draw in customers. Cost pressures on distributors are being passed on to manufacturers. There is also a trend towards reducing reimbursement of generic drugs by healthcare providers and health insurance schemes. The power of buyers is likely to increase over the forecast period as cost pressures on buyers increase Power Of Suppliers Power of suppliers - Low Pharmaceutical companies traditionally purchase high volumes of raw materials and keep excess manufacturing capacity in order to maintain production at consistently high levels. This practice therefore limits the bargaining power of suppliers. Problems with product availability, where these have occurred, have been due to violations of good manufacturing practice or other regulatory infringements rather than interruptions in the supply of raw materials. The generics industry also tends to act as a supplier of active pharmaceutical ingredients (APIs) to other pharma companies, giving it a secure early supply chain. However, we note that the price of raw materials has been steadily increasing in recent years; this provides fascinating possibilities as to the future influence that suppliers will hold on the generics market. Page 225