Generic Drugs Market Size (2024 – 2030)

The Global Generic Drugs Market was valued at USD 410 billion in 2023 and is projected to grow at a CAGR of 6% from 2024 to 2030. The market is expected to reach USD 620 billion by 2030.

Generic drugs are identical to brand-name drugs in terms of dosage, strength, quality, and intended use, but they are sold at lower prices due to reduced research and development costs. The increasing prevalence of chronic diseases, the need for cost-effective medications, and growing healthcare expenditure globally drive the demand for generic drugs. Governments and healthcare providers prefer generic drugs due to their affordability, contributing to significant market growth.

Key Market Insights:

• Cardiovascular diseases represent the largest application area for generic drugs, accounting for over 30% of market revenue in 2023. The increasing prevalence of heart diseases and hypertension worldwide is a major driver of growth in this segment.

• The oncology segment is projected to witness the fastest growth with a CAGR of 7.1% during the forecast period, driven by rising cancer incidence and the growing use of biosimilars in cancer treatment.

• Biosimilars, a subcategory of generic drugs, are gaining prominence due to their ability to treat complex diseases like cancer and autoimmune disorders. In 2023, biosimilars accounted for 15% of the market, with increasing adoption expected over the forecast period.

• North America is the dominant region, holding 45% of the global market share in 2023, supported by favorable regulatory environments, rising demand for generic drugs, and strong healthcare infrastructure.

• The Asia-Pacific region is expected to be the fastest-growing market with a CAGR of 7.4% from 2024 to 2030. This growth is driven by expanding healthcare access, growing pharmaceutical production capabilities, and rising chronic disease prevalence.

Global Generic Drugs Market Drivers:

Rising Prevalence of Chronic Diseases is driving the market growth

The increasing global burden of chronic diseases, including cardiovascular diseases, diabetes, cancer, and respiratory disorders, is driving the demand for generic drugs. With an aging population and changing lifestyles, the prevalence of chronic conditions has escalated, leading to a sustained need for long-term medication. Generic drugs offer an affordable alternative to branded drugs, making them highly desirable for patients requiring ongoing treatment for chronic diseases. Cardiovascular diseases (CVDs), in particular, are the leading cause of death globally. The cost of branded medications for heart diseases, hypertension, and cholesterol management can be prohibitively high for many patients, especially in low- and middle-income countries. Generic drugs provide a cost-effective solution for managing these conditions, ensuring wider access to essential medicines. The WHO has emphasized the need for equitable access to medications for chronic diseases, further boosting the uptake of generic drugs across the globe.

Cost-Effectiveness and Government Initiatives is driving the market growth

The rising cost of healthcare globally has placed significant pressure on governments, insurance companies, and healthcare providers to reduce pharmaceutical spending. Generic drugs, which cost significantly less than branded drugs, play a crucial role in lowering healthcare costs without compromising treatment quality. Governments and healthcare systems worldwide are increasingly encouraging the use of generic drugs to contain healthcare costs. Many countries have implemented policies that favor the use of generic drugs in public healthcare systems. For instance, the U.S. government, through the FDA’s generic drug approval process, ensures that generics meet the same standards of quality, safety, and efficacy as their branded counterparts. In Europe, the European Medicines Agency (EMA) has streamlined the approval process for generic medicines, ensuring their widespread availability. In addition, healthcare providers and insurers often incentivize the prescription of generics over branded drugs. For example, many insurance plans in the U.S. require the use of generics when available, as they help reduce overall healthcare costs for both patients and insurers. The rise in biosimilars—generic versions of biologic drugs—is also contributing to cost savings, especially in the treatment of complex diseases like cancer and autoimmune disorders.

Patent Expirations and the Growth of Biosimilars is driving the market growth

Patent expirations of blockbuster drugs are a major growth driver in the generic drugs market. When the patent protection for a branded drug expires, generic versions can be introduced to the market, often at a fraction of the cost of the original drug. This creates an opportunity for generic drug manufacturers to gain market share by offering more affordable alternatives to patients and healthcare providers. The loss of exclusivity for several high-revenue drugs in recent years has led to a surge in generic drug approvals. For instance, the expiration of patents for major cardiovascular and oncology drugs has allowed generic versions to enter the market, driving down prices and expanding access to treatment. This trend is expected to continue as more blockbuster drugs lose patent protection in the coming years. Additionally, the rise of biosimilars is transforming the biologics market. Biologics are complex drugs derived from living organisms, and they have been used to treat diseases such as cancer, rheumatoid arthritis, and inflammatory bowel disease. Biosimilars are generic versions of biologics that offer similar efficacy and safety at a lower cost. The growing acceptance of biosimilars, particularly in Europe and the U.S., is creating new growth opportunities in the generic drugs market.

Global Generic Drugs Market Challenges and Restraints:

Intense Price Competition is restricting the market growth

While the cost-effectiveness of generic drugs is a major driver of market growth, it also presents a significant challenge in the form of intense price competition. The generic drugs market is highly competitive, with numerous players vying for market share by offering their products at lower prices. As a result, profit margins in the generic drug industry are typically lower than those in the branded drug sector. The competitive pricing environment is particularly challenging for smaller generic drug manufacturers, who may struggle to maintain profitability in the face of declining prices. Larger companies with more diversified product portfolios and greater economies of scale are better equipped to withstand price pressures, but even they face challenges in sustaining profit margins. The increasing entry of new players, particularly from low-cost manufacturing regions such as India and China, has further intensified price competition in the global market.

Regulatory Hurdles and Quality Concerns is restricting the market growth

While regulatory agencies play a crucial role in ensuring the safety, efficacy, and quality of generic drugs, navigating the complex regulatory landscape presents challenges for generic drug manufacturers. Each country has its own regulatory framework, and obtaining approvals for generic drugs in multiple markets can be a time-consuming and costly process. For instance, in the United States, the FDA’s Abbreviated New Drug Application (ANDA) process requires generic drug manufacturers to demonstrate that their products are bioequivalent to the branded drugs. This involves conducting clinical studies and stability testing, which can delay market entry and increase development costs. Similarly, in Europe, the EMA has stringent requirements for the approval of biosimilars, requiring extensive clinical data to demonstrate safety and efficacy. In addition to regulatory hurdles, quality concerns have emerged as a significant challenge in the global generic drugs market. Several high-profile recalls of generic drugs in recent years have raised questions about the quality and manufacturing practices of some generic drug manufacturers. Issues such as contamination, improper labeling, and substandard active ingredients have led to regulatory scrutiny and heightened concerns about the reliability of generic drugs.

Market Opportunities:

The global generic drugs market presents significant opportunities for growth, driven by the increasing demand for affordable healthcare solutions, the rising prevalence of chronic diseases, and the ongoing patent expirations of major branded drugs. One of the most promising opportunities lies in the expansion of biosimilars. Biosimilars offer a cost-effective alternative to high-cost biologics, which are increasingly used to treat complex conditions such as cancer, autoimmune diseases, and inflammatory disorders. The global biosimilar market is expected to grow rapidly over the next decade as several high-revenue biologic drugs lose patent protection, creating a favorable environment for the introduction of biosimilars. Moreover, the growing adoption of digital healthcare technologies presents new opportunities for generic drug manufacturers. Telemedicine, e-prescriptions, and online pharmacies are transforming the way patients access medications, particularly in the wake of the COVID-19 pandemic. These digital platforms provide a convenient and cost-effective way for patients to obtain generic drugs, expanding market reach, especially in regions with limited access to traditional healthcare facilities.

GENERIC DRUGS MARKET REPORT COVERAGE:

Generic Drugs Market Segmentation: By Type

• Simple Generic Drugs

• Super Generic Drugs

• Biosimilars

The Simple Generic Drugs segment dominates the market due to its widespread use in the treatment of various chronic conditions. Simple generics are bioequivalent to branded drugs and offer a more cost-effective solution for patients. The high adoption of simple generics, particularly for cardiovascular diseases, diabetes, and respiratory conditions, ensures this segment’s leading position.

Generic Drugs Market Segmentation: By Application

• Cardiovascular Diseases

• Central Nervous System Diseases

• Oncology

• Others

The Cardiovascular Diseases segment holds the largest market share, driven by the high prevalence of heart diseases, hypertension, and stroke. As cardiovascular conditions require long-term medication, generic drugs play a vital role in ensuring affordability and access to essential treatments, particularly in low- and middle-income regions.

Generic Drugs Market Segmentation: By Region

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

North America leads the global generic drugs market, accounting for over 45% of the total revenue in 2023. This dominance is driven by the region’s high healthcare spending, favorable regulatory environment, and the growing demand for affordable medications. The U.S. is a key market, with the FDA actively promoting the use of generics to reduce healthcare costs. Moreover, the rise of biosimilars in the U.S. is further boosting the market, especially for oncology and autoimmune treatments.

COVID-19 Impact Analysis:

The COVID-19 pandemic had a profound impact on the global healthcare sector, and the generic drugs market was no exception. Initially, the pandemic led to disruptions in supply chains, affecting the production and distribution of generic drugs, especially in countries reliant on imports of active pharmaceutical ingredients (APIs). Lockdowns, travel restrictions, and factory closures in major pharmaceutical manufacturing hubs such as China and India caused delays in drug production and shortages of essential medicines. However, the pandemic also highlighted the importance of affordable medications, particularly as healthcare systems around the world were stretched to their limits. As the economic impact of the pandemic deepened, governments and healthcare providers turned to generic drugs as a cost-effective solution to manage the rising demand for medications. In the U.S., for example, the FDA expedited the approval of generic drugs to ensure adequate supply during the crisis. Moreover, the pandemic accelerated the adoption of digital healthcare platforms, such as telemedicine and online pharmacies, which facilitated the remote prescription and delivery of generic drugs. This shift towards digital healthcare is expected to persist beyond the pandemic, offering new growth opportunities for the generic drugs market. The increased focus on healthcare preparedness and the need to build more resilient supply chains has prompted governments to invest in the local production of essential medicines, including generics. This trend is expected to continue as countries seek to reduce their reliance on global supply chains and ensure the availability of critical medicines during future health crises.

Latest Trends/Developments:

Several key trends are shaping the future of the global generic drugs market. One of the most significant trends is the rise of biosimilars, which are expected to drive growth in the coming years. With several high-revenue biologics set to lose patent protection, the biosimilar market is poised for rapid expansion. Biosimilars offer a more affordable alternative to biologic drugs used to treat complex conditions such as cancer, rheumatoid arthritis, and multiple sclerosis. As regulatory frameworks for biosimilars continue to evolve, particularly in the U.S. and Europe, more biosimilars are expected to enter the market, increasing competition and driving down costs. Another important trend is the growing role of digital healthcare in the distribution and prescription of generic drugs. The pandemic accelerated the adoption of telemedicine and e-pharmacy platforms, making it easier for patients to access medications remotely. This trend is expected to continue, particularly in regions with limited access to traditional healthcare services. Digital platforms provide a convenient and cost-effective way for patients to obtain generic drugs, expanding market reach and improving patient outcomes. In addition, regulatory reforms aimed at streamlining the approval processes for generic drugs are expected to boost market growth. In the U.S., the FDA’s Drug Competition Action Plan is focused on speeding up the approval of generic drugs to increase competition and lower drug prices. Similarly, the EMA in Europe is working to accelerate the approval of biosimilars to promote their adoption.

Key Players:

1. Teva Pharmaceuticals

2. Novartis International AG (Sandoz)

3. Mylan N.V.

4. Sun Pharmaceutical Industries Ltd.

5. Pfizer Inc.

6. Dr. Reddy's Laboratories

7. Cipla Ltd.

8. Lupin Limited

9. Aurobindo Pharma Ltd.

10. Glenmark Pharmaceuticals