New growth spurt:
Generic industry gaining ground

By almost all accounts, 2002 was a banner year for the generic drug industry. According to IMS, the share of prescriptions dispensed for generics in 2002 was 40%, up from 38% in 2001. The generic dollar volume in 2002 was $16 billion, up $4 billion from 2001. "Generics are growing faster than the total U.S. dollar pharmaceutical market," said Doug Long, VP, industry relations for IMS. Long attributes industry growth to several factors, most notably the number of blockbuster drugs that went off patent in 2002.

According to IMS, the proliferation of three-tier co-pays, fewer new product introductions by brand-name drug companies, a favorable political climate, and a sluggish economy also contributed to a surge in generic Rxs last year. Long said the generic market has been growing at a steady pace since the middle of 2001, when Prozac lost its patent. "Since then, there have been 10 or 11 blockbuster drugs that have lost patent protection," he noted. Among the patent expirations in 2002 that have had an impact on generic Rxs are: Glucophage, Zestril, Augmentin, Claritin, and Prilosec.

Does the generic industry expect similar growth patterns in 2003 and beyond? "It's hard to say. It's an inexact science," commented Long. He did, however, take a stab at forecasting, predicting that 2003 will be a good year for generic drugs because the industry will see the full-year effect of products that lost patent protection in 2002. He sees a particularly good 2003 for generic Claritin, Prilosec, and generic Augmentin because these agents didn't go off patent until mid-2002. Yet despite the optimistic forecast, he doesn't think 2003-04 will have the same magnitude of growth as 2001-02. Much stronger years will be 2005-06 when many brand drugs are expected to go off patent.

Anthony Vecchione

Tony Vecchione. New growth spurt: Generic industry gaining ground.

Drug Topics

Generic Supplement;147:8S.