Abstract
This report provides a complete assessment of the US$1.43 billion Australian
generic pharmaceutical market.
Valued at US$1.43 billion, the Australian generics market accounts for 14.9%
of the total pharma market value but only 30% by volume. With the government
keen to keep drug costs down, and with a number of major branded products
losing patent protection the market is one of the safer opportunities in the
region. But how will the market grow and in what way?
The central challenge to the Australian drug industry is the government' s
continued pressure to keep prices low in an effort to rein in PBS expenditure.
The change of regime is unlikely to help and the new Labor government will, if
anything, be even stricter.
Generics are not exempt from this; price reforms will place heavy downward
pressure on the value of the market for generics. These began with the 12.5%
cuts in 2005, and will go on until at least 2012. The most significant cut is
likely to be the 25% reduction mooted for August 2008. These should have the
effect of boosting volumes while depressing revenues.
However, generics are widely used and well accepted among patients and
prescribers. Generic expenditure per capita is on a rough par with the
Netherlands or Switzerland. Patent expiries will continue to be the main
driver of value growth in the market.
Opportunities?
More importantly, generic dispensing is, as a % of the whole, relatively low
at 30% of total prescriptions. With price a big issue, and with the prospect
of generic competition on leading products (such as atorvastatin, Australia' s
leading product) then the opportunity for generic volumes is good - but will
values follow?
The generic industry is highly concentrated. Until recently, the only
significant player was Alphapharm, although its position at the top has come
under increasing threat from the new Sigma/Arrow partnership. The market is
becoming more open to overseas players, although they are as yet to take
significant market share. Sandoz, Ranbaxy and Teva all have established an
interest in the market.
Now you can easily evaluate the Australian generic drugs market
But who are the leading players and what are their strengths/weaknesses? What
barriers to market entry exist? Where are the best opportunities? What is the
operating and regulatory environment for companies? The answers to these and
many other questions can be found in this 74-page report
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