The Star Online, Saturday 19 August 2006

Huge potential in generic drugs

THE increase in world expenditure on pharmaceuticals, arising mainly from the growing size of the ageing population, will provide further impetus for the industry’s growth.

A report by DataMonitor shows that with an anticipated annual growth rate of 7.5% for 2005-2010, the global pharmaceutical market is projected to increase to US$762.2bil by end-2010 from US$534.8bil in 2005.

The expected increase in government purchase of generic drugs as a measure to contain healthcare costs, together with the anticipated expiry of several branded drugs, offer vast opportunities for the production of patent expired generic drugs for the local and export markets.

Another prospect for growth of the industry in Malaysia is the positive development worldwide for biotech drugs. Malaysia is one of the world’s 12 most bio-diverse countries and offers high potential for sourcing active compounds for therapeutics and wellness products.

The market for bio-generics is relatively unexplored. The expiry of patents of highly demanded protein therapeutics allows further development of lower cost and non-branded versions of conventionally highly priced protein drugs.

The market for bio-generics is estimated to grow at an annual average rate of 70% during the period 2007-2011, and will generate total revenue of more than US$16bil by 2011.

Niche pharmaceutical products are also expected to create a significant market segment, as well as high export potential. These products are targeted at specific smaller segments of the market but commanding premium prices.