Generic Drugs Take a Huge Slice of Market Share Pie

RESEARCH TRIANGLE PARK, N.C., April 5 /PRNewswire/ -- Branded drugs lose as much as 30% of their average market share when a first generic drug version hits the market. Successive generic launches may eat away as much as 90% of the branded drug's market share.

"Generic drugs have grown into a $40 billion plus industry," said Eric Bolesh, lead author of "Combating Generics: Pharmaceutical Brand Defense for 2007," a report from research firm Cutting Edge Information (http://www.PharmaGenerics.com). "Generics are eating away at the market pie, leaving little for branded drugs that have reached patent expiration."

The report shows how companies utilize both marketing and R&D expertise to protect their brands' market share from generic challengers. The development of new product formulations was the most frequent anti-generic strategy used by surveyed companies. Pricing changes for threatened brands and reliance on general franchise strength to boost sales were the second and third most- employed strategies, respectively.

Companies use marketing strategies more frequently than R&D efforts, such as new formulations and next-generation drugs, because they are more easily controllable and reliable. However, they are also less valuable than science- based strategies that retain revenue, deliver high returns on investment and create evergreening patent protection. The best approach is multifaceted and includes both strategy types.

"Generic drug sales are expected to reach $60 billion by next year and today account for more than half of all prescriptions filled in the US," said Bolesh. "Branded companies must employ a range of defensive strategies if they are to maintain an influential market position after their patents reach expiration."

For more information on this report or to learn about other research being conducted by Cutting Edge Information, contact Eric Bolesh at eric_bolesh@cuttingedgeinfo.com or 919-433-0209. SOURCE Cutting Edge Information