The generic pharmaceutical industry remains one of the most entrepreneurial and dynamic facets of the healthcare system. According to IMS Institute for Healthcare, generic pharmaceuticals fill 80 percent of the prescriptions dispensed in the U.S., but consume only 27 percent of total drug spending. In addition, the use of FDA-approved generic drugs has saved U.S. consumers, patients, and the healthcare system more than $1 trillion over the past decade.1 With several key issues and opportunities arising that will directly impact patient access and affordability, the coming year will be pivotal for the generics industry. This report will discuss four trends shaping the generics industry, providing guidance on how companies can successfully navigate each.

Biosimilars

With over $40 billion (in U.S. sales) of brand biologics coming off patent by the end of 2016, there is now more opportunity for generic drug makers than even before.2 The industry will continue to see the focus shift from small-molecule drugs to biologics, but despite the potential for growth, this avenue still has many roadblocks. Generics companies are faced with a variety of challenges – from state legislative fights designed to impede access to new biosimilar medicines, to recent developments around the biosimilar naming convention. Addressing these challenges will allow the industry to expand its influence in the biosimilars market, while simultaneously increasing patient access to various medicines by lowering the cost of life-saving biologics.

State Legislative Fights

Although an opportunity for the generics market, biosimilars proved to be a significant threat for Big Pharma in 2013. This became evident when a series of bills were introduced in various states to impede patient access to new biosimilar medicines. A bill introduced by some of the country’s largest biotechs “was designed to drive [Big Pharma] profits and thwart competition from biosimilars.”3 The legislation put forth in a number of states aimed to limit interchangeable biosimilar substitution, but several state legislatures – including California, Florida, Texas, and Indiana among others – refused to enact. Blocking these state bills is a victory for the generics industry in anticipation of the approval of biosimilars in the U.S.

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