Recent economic developments present constant challenges to every country’s economic landscape and deepen the underfinancing of the healthcare sector and unfortunately the austerity and need of cost containment measures.
This is combined with increased M&A activity and intensive processes of vertical and horizontal cooperation activities, driven by the need for industry players to optimize R&D spending and improve competitiveness.
The Generic branch of the pharma industry will continue to play significant role in creating sustaining healthcare environment in Europe.It is a natural ally of the governments in their effort to optimize healthcare spending and increase efficiency of healthcare systems, especially in their reimbursement and pricing pharmaceutical policies.
The factors that drive on continuous challenge of pricing and reimbursement are well known
- ageing population,
- flat or negative economic growth,
- quick price erosion in the generic sector.
However, there is substantial growth potential for generic business players, different in different economic areas – stagnation to negative in value for developed markets: steady but yet single digit growth for CEE (excluding Poland) and serious double digit growth in some of the so called BRICKS markets (Russia, India, Vietnam etc.).
Additional driving forces of generic growth (much more in packs sold than in value) are increased patient access in chronic disease areas vs flat spending in the same areas; price decrease of off-patent segments INNs as soon as generic penetration in these segments is available, government policies to help utilization of cost optimization via generic penetration and competition.
On this challenging landscape new forms of cooperation between industry players are on hand and their significance will grow – co-marketing and co-development activities; contract manufacturing ; out licensing, etc. EU generic and biosimilar industry will develop further despite this aggressive and to some extend hostile environment.
New initiatives to boost successful competition are on place (patent waiver third countries to help generics of EU be competitive vs Canada, USA and Japan generics).
Flexibility and quick reaction to the environmental changes as well as shift of the operational market model will ensure success to generic players that are able to achieve it.