Growth Prospects of Generic Drug Manufacturing in Asia

A combination of demographics, economics, and government policies is presenting good growth prospects for generic drug manufacturers in Asia, according to a new report from the international marketing consulting company, Frost & Sullivan. By 2007, the total generic drug market in Asia (excluding China and Japan) is forecast at US$6.58 billion, an increase from $3.50 billion in 2001.

A rapidly aging population, limited purchasing power, and government curbs on healthcare spending are fueling a demand for less-expensive generic drugs. Patent expirations in the near future further underline the potential for growth. Strict budgetary controls by governments on hospital reimbursements are likely to result in public hospitals prescribing less-expensive generic drugs.

Patents are soon to expire on 47 blockbuster drugs. "These patent expirations will give generic manufacturers a chance to replenish product pipelines with new drugs to expand markets,” says Sabrina Cheah, a healthcare analyst at Frost & Sullivan.

Two challenges confront manufacturers before they can maximize growth. One is that intensifying competition is creating pricing rivalry. Another is the widespread opinion that generic products are inferior in quality. "Developing products in the niche areas, emphasizing brand awareness campaigns to create brand loyalty among end-users, and adopting good manufacturing practices will strengthen competitive edge,” notes Ms. Cheah.