Monday, April 11, 2011

GENERIC INJECTABLE MARKET – UNITED STATES


The U.S. generic Injectable industry reported approximately $3.7 billion in sales in 2009 and grew at a compound annual growth rate (“CAGR”) of 6.6% over the last five years.  The U.S. generic Injectable drug market, is expected to grow at a CAGR of nearly 10% over the next three years due in large part to
1.   the continued focus of the U.S. government on reducing medical costs due to  pressures from large spending deficits
2.   an aging population
3.   the introduction of new products into the U.S. market. As of the end of  2009, estimates suggest that only approximately 300 of the approximately 750 FDA-approved small molecule Injectable products in the U.S. have approved generic formulations.
4.  In addition, Injectable products 39 with U.S. patent protection that generated over $8.8 billion in U.S. revenue in 2009 may become subject to generic competition in 2011 and 2012.


There are significant barriers to entry facing generic and specialty Injectable companies in the U.S. market.
These barriers include:
1.  Complex manufacturing processes that must comply with high cGMP and FDA
regulatory standards, particularly with respect to oncology products;
2.  Difficulty in developing and sourcing often complex APIs required for product development;
3.  FDA requirements that certain products be produced in dedicated single-product facilities or manufacturing lines;
4.  Long regulatory approval times;
5.  Complex U.S. wholesale and GPO market channels through which end-user customers are reached; and
6.  Various strategies undertaken by branded pharmaceutical companies to extend the exclusivity period of their products.
These barriers create attractive industry characteristics for successful participants, including fewer competitors, high loyalty from GPO and end-user customers and, as compared to oral generic drugs, more favorable pricing environments, stable demand and long product life cycles.

Due to these barriers to entry, the generic Injectable industry has several noteworthy characteristics, including:
1.  Smaller sales volume generic products can often generate significant profitability;
2.  GPOs and end-user customers in the generic Injectable industry commonly exhibit strong loyalty to companies that can dependably meet their requirements and consistently provide quality products; and
3.  due to difficulties sourcing APIs, developing Injectable finished products and consistently manufacturing these products, the Injectable drug industry has historically been subject to numerous product shortages, which have increased in 2010 for certain critical emergency use and anesthetic products. These drug shortages create opportunities for companies who can reliably manufacture and commercialize high-quality Injectable products.