Countries where more than one-third of all prescriptions are estimated to be generic include:

USA                             Germany
Canada                        UK
Australia                      Netherlands
New Zealand               Denmark
Turkey                         Sweden
most of East Europe   much of Latin America

Developments in the U.S. – nationally the largest pharmaceutical market in the world by sales value - demonstrate the interaction of strong patent protection for new medicines with deep market penetration by generics after patent expiry. In 2008, about 69% of all U.S. prescriptions were generic, but competitive pricing meant that generics were responsible for only 16% of all prescription costs¹. Ten years earlier, the corresponding levels of generic market share in the U.S. were about 41% of prescriptions and 10% of sales value².

The massive advance of generic market penetration in the U.S. is at the expense of prescriptions for branded medicines that are no longer protected by patents. Recent years, in particular, have seen patent expiry of an exceptionally high number of ‘blockbuster’ medicines.

The growing but modest generic share by sales value is attributable partly to their low prices and partly to the ‘American compromise’ whereby patented medicines enjoy pricing freedom in order to encourage pharmaceutical innovation in which the U.S. continues to lead the world, both in chemical synthesis and in biotechnology.

Footnotes

[1] IMS statistics, Generic Pharmaceutical Association, Arlington/VA, “Economic Analysis: Generic Pharmaceuticals 1999-2008”, May 2009
[2] IMS America, as reported in Pharma Pricing & Reimbursement 4(5), 111, May 1999

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