Generics competition in the USA assessed by Edison analyst

With more than 90% of US prescriptions being for a generic medicine, generic drugs might be thought of as a growth area.

However, the opposite is true and while generic competition is now the third inevitability (with death and taxes), US generic price deflation is running at about 5%-10% a year and has had a drastic effect on the sales and earnings of most generic pharma companies, Andy Smith, healthcare analyst at Edison Investment Research explains.

The Food and Drug Administration reports that generic drugs have saved consumers $1.67 trillion or more, with US spending on generics expected to increase to $505 billion by 2021, research firm Quintiles reports. The FDA’s Office of Generic Drugs tracks generic usage and marked 2017 as a record-breaking year for approvals, with 1,027 new generic drugs receiving marketing authorization – an increase of 214 from record figures the previous year.