Increasing focus on high-value generics and development of innovative products will drive the growth of mid-size pharma companies, says GBI Research

The worldwide pharmaceutical market is facing challenges due to pricing pressure and fewer pipeline products due to high failure rates. Therefore, mid-size pharma companies are gaining importance in the market, as they mainly focus on developing generic products, which help to reduce the overall healthcare cost burden at country level, according to business intelligence provider GBI Research.

The company’s latest report, The Mid-Size Pharmaceutical Market, states that the majority of mid-size pharma companies are located in the Asia-Pacific region and are mostly generic-focused companies with more than 100 marketed products. These companies are showing interest in expanding into the emerging markets through strategic alliances, as these geographies promise strong revenue potential due to a combination of increasing elderly populations, increasing healthcare awareness, and high usage of generic products due to limited affordability.

Top mid-size pharma companies also focus on the development of innovative products for specific therapy areas, as well as the development of products for rare diseases in addition to the development of generic products. These mid-size companies compete with large companies by specializing in particular therapy areas, driving the level of innovation across the industry.

Vinod Makthal, analyst at GBI Research comments, “A number of mid-size pharma companies are expected to show an immense growth in their revenue during the forecast period and companies such as Regeneron Pharmaceuticals are expected to enter the large pharma segment due to an increase in expected net sales of their key marketed products.

“Despite having a high failure rate in the pharmaceutical pipeline products, the key mid-size pharma companies have invested approximately $1 billion on average in the research and development of pipeline products, in hope of successfully competing against large pharma companies in the market.”

Owing to the lack of investment by mid-size pharma companies in the research and development of novel products, generating higher revenue is challenging. However, many mid-size companies are increasing their research capabilities to focus on fragmented research activities such as the development of novel molecules, novel formulations of existing products, and the development of novel drug delivery technologies. In addition, a shift towards in-house R&D helps mid-size companies to overcome the limited revenue growth potential of the generic drug business.

Vinod continues, “Mid-size pharma companies are shifting their business models based on low-value generics to high value generics, such as niche or specialty products or biosimilars, which are more difficult to copy.

“Even though the high cost of developing biosimilars acts as a barrier for many companies, mid-size pharma companies adapting how they develop biosimilars of high-value biologics are likely to gain a competitive advantage over those focusing on conventional generics. This is because biosimilars are sold at only a 30% discount compared with their branded counterpart, while conventional generics are sold at a discount of up to 70%.”

Information based on the GBI Research report: The Mid-Size Pharmaceutical Market: Market Assessment, Growth Forecasts and Strategic Consolidations for Key Players

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NOTES TO EDITORS

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