FiercePharma | Carly Helfand
The Hatch-Waxman Act shook up the generic drugs business in 1984, and
almost 30 years later, it's safe to say the law had its desired effect. About
84% of the 4 billion prescriptions written each year are for generic drugs,
saving patients and government programs billions of dollars a year. In other
words, generic drugs are big business. And with a slew of blockbuster brands
now off patent, it's a big business with growing pains.
As companies bulked up to take on copies of the world's best-selling drugs,
a wave of mergers has swept the industry. Many credit Actavis ($ACT) CEO Paul Bisaro with starting that trend; then the Watson CEO, his 2012 takeover of Actavis sent a clear message of "go big or
go home" reverberating throughout the generics business. Actavis hasn't
stopped scouting for deals, and many of its peers have followed suit.
Companies are joining forces to take on new markets, too. Like branded
drugmakers, generics companies are looking toward emerging markets now that
some of the biggest blockbusters have already fallen to generic competition and
Western markets are stagnating. Many generics makers have teamed up with or
bought local companies that can help with manufacturing, marketing and
distribution. Big Pharma companies add their names--and lend their prestige--to
domestically made products to differentiate them from the masses of
competition. And joining forces with the locals can sometimes be a requirement.
To sell one of 70-plus essential drugs in South Africa, companies have to make
those drugs in South Africa. Russia requires foreign drugmakers to partner with
local companies and share technology to get in on the action in that market.
It's not only emerging markets that are promising growth opportunities for generics makers. Japan, with its aging population and eye on increasing generics usage, has
become a prime target for out-of-town generics makers. The Japanese newspaper Nikkei
expects the country's market for generics to expand by 8% per year, hitting
$13.2 billion in 2017. Others, like Spain, are looking to bring healthcare costs under control. The country has
introduced mandatory generics prescribing where available, a measure that some
expect could save it €2 billion a year. Not all countries are quite so eager to
attract foreign investment, however. India is one. It boasts a strong generics industry of its own, and its companies
led the way worldwide in terms of approvals last year, with 205.
So go ahead and peruse the Top 10 to find out how these trends and market
forces are shaping the industry's biggest players--and vice versa. By and
large, revenue numbers for the rankings came from companies' sales reports. The
2012 generics sales figure for Hospira ($HSP), which doesn't report generics numbers separately, came from
EvaluatePharma's 2013 World Preview. We converted currencies into dollars where
necessary, using exchange rates from the days companies closed out their
financial years (March 31, 2013, for Sun and Daiichi Sankyo; June 30, 2013, for Aspen; December 31, 2012, for Sanofi, $SNY).