Key Market Developments in the Generic Drugs Segment

Key market developments in the generic drugs segment within the global pharma. It’s challenges and opportunities shaping the future of generic drugs.

In 2023, generic-drug approvals in the US surged to a recent peak, although the number of first-generic approvals saw a comparative decline. DCAT Value Chain Insights delves into these figures and examines the strategic maneuvers of leading generic-drug companies.

Overview of US Generic-Drug Approvals

How are generic-drug approvals trending in the US? In 2023, the Center for Drug Evaluation and Research (CDER) of the US Food and Drug Administration (FDA) greenlit or provisionally approved 956 generic-drug applications, also known as abbreviated new drug applications (ANDAs) (refer to Figure 1). Tentative approval, however, does not authorize the marketing of the generic-drug product; final approval hinges on resolving all patent/exclusivity issues. This figure represents a slight uptick from recent years, with FDA’s CDER granting approval to 914 generic drugs in 2022 and only 776 in 2021, marking a recent low.

When analyzing generic-drug approvals, particular attention should be paid to “first-generic” approvals, which denote the initial approval by the US Food and Drug Administration (FDA) authorizing a manufacturer to introduce a generic drug product to the US market. In 2023, the FDA’s Center for Drug Evaluation and Research (CDER) greenlit 90 first generics, a slight decrease from the 107 first generics approved in 2022. However, this figure aligns with the 93 first generics approved in 2021, indicating stability in approval rates over recent years (refer to Figure 2).

Amidst the evolving landscape of the generics market, significant market developments and strategic maneuvers by leading players shape the trajectory of the industry. Let’s delve into the intricacies of these developments and their implications for the generics sector.

Navigating Cost-Competitive Markets

The generics market, characterized by intense cost competition, prompts leading generic-drug companies to adopt strategies aimed at bolstering margins, particularly in the lucrative US market. This entails restructuring initiatives and a shift towards diversified product portfolios that emphasize value-added offerings. Despite the stability witnessed in the US generics market since 2019, persistent pricing pressures persist, driving companies to seek innovative avenues for growth.

Teva’s “Pivot-to-Growth” Strategy

Teva, a prominent player in the generics arena, continues to execute its “Pivot-to-Growth” strategy under the leadership of Richard Francis, who assumed the role of President and CEO in January 2023. Building on the groundwork laid by his predecessor, Kåre Schultz, Francis is tasked with advancing Teva’s turnaround efforts across four main growth pillars: innovative drugs, biosimilars, core generics business, and debt reduction. Notably, Teva’s focus on complex generics underscores its commitment to strategic differentiation and value creation.

Viatris’ Restructuring Endeavors

Viatris, another key player in the generics space, embarked on a significant restructuring program in 2020, aimed at optimizing commercial capabilities and streamlining manufacturing operations. The company’s robust revenue performance in 2023, albeit amidst a challenging market environment, reflects the fruition of its restructuring initiatives. By aligning its product portfolio with evolving market dynamics, Viatris remains poised for sustainable growth in the generics landscape.

Sandoz’s Stand-alone Journey

Following its spin-off from Novartis in October 2023, Sandoz, the renowned generics and biosimilars business, marked its inaugural year as an independent entity in 2023. With a steadfast focus on delivering value to patients and healthcare providers, Sandoz reported strong revenue growth across its generics and biosimilars segments. Notably, the success of its biosimilars portfolio underscores the increasing demand for affordable biologic alternatives in the market.

Shaping the Future of Generics

As the generics industry continues to evolve, strategic initiatives undertaken by leading players such as Teva, Viatris, and Sandoz play a pivotal role in shaping its trajectory. By navigating competitive pressures, optimizing operations, and capitalizing on emerging opportunities, these companies pave the way for sustainable growth and innovation in the generics market. Looking ahead, strategic agility and a relentless focus on value creation will be paramount in navigating the dynamic generics landscape.

Source: What’s Trending: Generic Drugs by the Numbers & Key Market Developments

Global Pharma

Global Pharma