The Global Surge in Generic Drug Usage

Generic drugs have long been a mainstay of the pharmaceutical industry since they provide more economical options to brand-name pharmaceuticals. It is anticipated that the generic drug market will reach USD 546.03 billion by 2031. Because of trademark regulations, generic medications may look different from their brand-name counterparts, but they must be bioequivalent in terms of how the body metabolizes them, with an active component change of no more than 3.5% permitted. Because of their equal efficacy, generic medications are becoming a popular choice for patients all over the world.

Global presence

Generic Drugs, as the name suggests, are basically the carbon copy of a patented, well-established drug that has been approved by the regulatory agency of the country in which it was formulated. Generic Drugs are permitted to be sold only after the brand name drug has completed its patent duration, which is usually 20 years. Generic drugs are bioequivalent to their brand-name counterparts, implying that the efficacy rates for both are similar. While the active ingredients might be the same, the excipients, such as additives, fillers, colouring agents, etc, may vary.

The fact that generic medications are 80-85% less expensive than brand-name ones is encouraging for patients as well. This substantial drug price drop will benefit the sick population. Generic medications are prescribed by doctors for over 90% of prescriptions in the United States. With nearly 32,000 FDA-approved medications, the USA leads the world in pharmaceutical sales. Since 2009, this reliance on generic medications alone has saved the United States $2 trillion.

Global usage

90% of prescriptions are for generic medications, making the United States the country with the highest rate of generic medicine use. With an 85% generic prescription rate, the UK is not far behind, while China and Australia have 84% rates. In Germany, 81% of prescriptions are for generic medications, showing the country's heavy reliance on these drugs.

Generic drug consumption is widespread throughout Europe, and nations like the UK and Germany are major contributors to the region's strong market presence. France has a prescription rate of 28%, whereas Belgium and Spain have notable rates of 48% and 34%, respectively. With 22% of prescriptions for generic medications, Italy, another European country, has a lower prescription rate.

In South America, Brazil exhibited a generic drug prescription rate of 44.6% as patients, with a majority being older females, showed their willingness to opt for generic drugs as compared to the brand name drugs of the same chemical composition. With prescription rates of 73% and 84%, respectively, India and China are the two Asian countries that rely most on generic medications. This pattern is also seen in South Korea, which accounts for 58.3% of the market share with 0.3 billion prescriptions and $7.8 billion in spending.

Furthermore, while brand names were the original formulators of the drug, generic drugs price their product cheaper as compared to the brand name drug as an investment in the clinical trials and laboratory tests of the product is not required. Marketing of the drug is also not required as the brand name drug has already set the stage for them by building a customer base and spreading awareness about their medicine.

As of 2024, approximately 255 brand-name drugs are set to go off-market, with this number only expected to increase to 383 by 2026. This exit presents a window of opportunity for generic drug manufacturers to produce on a mass scale the bio-equivalent of the brand name drugs which has a patent lease of 20 years. After the patent expires, generic drugs are able to sell the chemical composition developed by the brand name. This also helps the generic drugs expand their reach to new patients who have limited knowledge about the brand-name drug.

Additionally, generic drugs, in order to be released into the market and prescribed by physicians, need to adhere to strict regulations of the drug Regulatory Agency of the particular country it was manufactured in, such as the FDA in the US and the European Medical Agency ( EMA) in the EU. These regulatory agencies are present in most countries, namely India, Italy, Brazil, etc and help control the unregulated manufacture or movement of drugs between various countries.

India and China are at the forefront of generic drug manufacturing, with India responsible for 20% of global supply by volume and producing around 60,000 different generic brands annually. While India is the largest producer of generic drugs, China supplies 80% of APIs to India and 54% of active ingredients to the USA, making it the world's largest supplier of APIs. However, outsourcing of drugs from India and China has resulted in these agencies bringing down strict actions.

While addressing the issues brought on by the growing supply and demand for generics, the industry must guarantee adherence to stringent regulatory requirements to preserve the safety and effectiveness of these medications, which continue to play a critical role in the global healthcare sector. Generic medications will continue to lead the global pharmaceutical business with sustained innovation and regulation, which will be advantageous to patients and healthcare systems alike.