Market Analysis--High Potential (kristie)

Market Analysis--High Potential (Kristie)

Now that the current market analysis has been performed it's important to analyze the high potential market for generic pharmaceutical manufacturing. As described by IBIS, brand-name manufactures faced a significant patent cliff beginning in 2011. In 2012 and beyond, several blockbuster-branded drug patents are expiring (exhibit). This provides a huge opportunity for the generics market, but also a very competitive market for the next several years. A downside of this patent cliff is the long-term viability of generics is threatened because less innovative brand drugs are being developed. Therefore, generic manufactures need to assess the market for new growth areas where customers demand cheaper alternatives to brand-name medicines and have promising numbers in the future. This section will analyze high potential markets that are readily apparent, not readily apparent, risks in high growth areas and market changes.

Potential Markets

Healthcare reform in the past 4 years has and will largely benefit the generic pharmaceutical industry and will increase areas of potential growth. With the healthcare reform more consumers are gaining coverage for prescription drugs and the generic drug approval process has been improved allowing generics to be manufactured faster. (Reference IBIS). Current, successful brand drugs are a key factor when determining areas of growth in the generic drug market. Generic drug companies can use the time the brand drug is under a patent to develop and plan the generic drug launch. Currently cardiovascular medication is a large and profitable drug submarkets.

Heart disease remains the leader in cause of death in the US (Center for Disease Control), therefore medications that treat and/or prevent heart disease is a readily apparent area for potential growth. The cardiovascular product area includes medications for lowering cholesterol (lipid regulators), which are the most commonly prescribed medications. Lipitor, manufactured by Pfizer, is the single highest grossing medication with sales in 2011 of $7.7 billion (businessinsider.com). Lipitor's patent expired in November of 2011 so a generic for this product has already been produced and caused Lipitor's sales to decline 42% in the first quarter of 2012. (businessinsider.com) The success of this generic drug is evidence there is an opportunity to track cardiovascular brand drugs and produce other generic cardiovascular drugs to treat and prevent heart disease. One brand drug that reduces cholesterol is Crestor, by AstraZeneca, which is currently a $4.4 billion drug whose patent is expiring in November of 2016 (businessinsider.com). Given the median time to have a generic drug application reviewed by the FDA is 31 months (fda.gov), there is sufficient time to reverse engineer Crestor to develop a generic and submit to the FDA for approval.

A biosimilar product market is not readily apparent and is an underserved portion of the market but proves to be a future growth area. A biosimilar is a biological product that is highly similar to a U.S.-licensed reference biological product although there are minor differences in clinically inactive components. Biosimilars are products that are not meaningfully different in terms of safety, purity and potency from the original biological product. Examples of a biosimilar are vaccines, blood and blood components, allergenics, somatic cells, gene therapy, tissues, and proteins. Unlike traditional drugs, biosimilars are made of human/animal material. The main component that makes this a future growth area is Obama signed into law The Patient Protection and Affordable Care Act (Affordable Care Act), on March 23, 2010. This law creates an abbreviated licensure pathway which enables the approval of biosimilars.

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