Austerity measures implemented by European countries are set to boost the growth of the generic drugs industry in the region to an annual value of $38.25bn by 2017, according to a new report.
This would be an increase of over $12bn from the market's current worth of about $26bn in the region, with the study's authors GBI Research citing national cost-cutting and drug pricing policies that will continue to support the use of generic drugs over innovative products.
At these figures, the generics market in Europe would have a compound annual growth rate (CAGR) of 6.5 per cent during the next five years compared to a CAGR of 4.8 per cent between 2005 and 2011.
In addition, patent expirations for major blockbuster drugs will also increase the consumption of generic products, said the report, as governments look to save money by buying cheaper copies of products.
These findings back a previous global report from analysts Frost & Sullivan that predicted the worldwide market for generics will grow from the $123.85bn generated in 2010 to $231bn by 2017, with the growth of generic drug use emerging markets also contributing to this international increase.
In Europe, however, the GBI Research report highlighted France, Germany and the UK as countries that have tightened healthcare budgets during the ongoing economic crisis affecting the continent, with drug pricing mechanisms restricting the introduction of new medicines.
Germany in particular has faced criticism from pharma that its reimbursement policy is limiting the launch of new drugs, while UK plans to introduce value-based pricing have caused the industry in the UK to voice concerns it could cause similar issues.
These worries have led to the Sir Andrew Witty, president of the trade body European Federation of Pharmaceutical Industries and Associations (EFPIA) and CEO of GlaxoSmithKline (GSK), to write to European leaders warning that short-term cost-cutting measures in medicine and unsuitable drug pricing methods could damage the region in the long-term.
The Organisation for Economic Co-operation and Development (OECD) also recently released a report that demonstrated healthcare spending had significantly reduced in Europe between 2009 and 2010.
See the report: Active Pharmaceutical Ingredients (API) Market in Europe to 2017