Non-retail generics entails any generic product that is not sold on a retail basis such as by way of a pharmacy. It is sold to non-retail entities such as hospitals, clinics, government entities, or purchased in bulk from an entity such as an insurer or organization. A non-retail generic market segment serves healthcare institutions/professionals to provide the most efficient and economical medications and the other services rather than the individual consumer.
There are many benefits of non-retail generics for healthcare systems, which include reduction in healthcare costs, making care more accessible to patients, decreased patient costs, avoidance of shortages, affordable treatments, and universal health coverage.
The market for generic drugs outside of retail is a large component of the pharmaceutical market concerning the distribution of generic drugs in non-retail distribution channels, namely hospitals, clinics, government or not-for-profit entities, and bulk purchasers such as insurance companies or large employers. This market is an important part of providing affordable treatments to healthcare practitioners and institutions and caters to the sustainability and access to healthcare around the globe.
A main reason the non-retail generics market is developing is the low price of generics relative to branded equivalent medications. Generally speaking, generics will cost from 80% to 85% less than brand name alternatives, which is an attractive choice for healthcare providers and institutions trying to manage costs.
The more significant price drop as compared to brand name drugs stems from the appropriately lower research and development costs of generics that typically do not have to go through the same level of clinical trials as brand name medications.
Generics are cheaper, which makes them attractive choices in the non-retail space where people buy things in bulk. In a healthcare ecosystem with limited resources, generics allow hospitals and clinics to save money and use their resources in a different way for even more patients to receive cheaper or potentially life-saving treatments. In addition, the low cost of generics assists international health initiatives that fight infectious diseases such as malaria that affects millions each year.
They want people to be able to receive effective treatment for these common and largely affordable diseases and generics help in that effort. People in some developing nations are not able to obtain needed medicines due to the out-of-pocket costs and generics enable them obtain those essential medicines.
While generic drugs can be less expensive than brand-name drugs, sometimes the assumption is made that generic drugs are not as effective and may not have the same quality as the brand name drug. Studies have shown that generic medications have consistently been found to provide the same therapeutic advantages.
Whether they are branded or generic, the medications have to meet many of the same standards with respect to safety and efficacy. Therefore, generics are deemed to be just as effective as brand medications. The FDA has also tested generics to see if they provide the same benefits as the branded drug, so both usually provide assurance of safety and quality.
The incorporation of generics into the non-retail market also encourages competition, which tends to reduce prices for all drugs, including branded products. This competitive nature benefits consumers and healthcare providers through lower prices.
Consequently, more generic product options are bound to emerge to meet the increasing demand for lower-cost drugs as consumers have become more accustomed to knowing generics priced lower than brand-name drugs offer effective treatment. That doesn't mean there aren't complexities with generics and their pricing. For example, generics are less expensive than brand-name drugs in the vast majority of cases.
However, generic drugs can be priced higher than the brand-name product for a variety of reasons; production costs, conditions in the market, or differences in production methods are just a couple factors. Still, even if you come across a generic that was sold for more than the brand-name, it is still likely the lower price, in general, means generics are offering a sizable cost savings.
The substantial turnover of patent expirations of branded drugs is a significant contributor to the growth of the non-retail generic market. When the patent of a drug expires, the other manufacturers enter the market and they can produce and sell generic versions of the drug, consequently providing additional competition at lower prices to consumers.
This market change means that branded manufacturers need to change their strategy to maintain some level of market share and preserve revenue, while generic manufacturers need to capitalize on this opportunity and have a place to enter the market and sell a less expensive version of the branded drug.
The impact of patent expires on the pharmaceutical industry is substantial, as is the impact on the generic drug market. When a patent of any branded drug expires, generic competitors can enter the market, usually at a lower price than the branded drug.
According to analytics and studies on drug price trends, it has been shown that patent expiries bring down drug prices by a substantial amount- on average decreasing prices by 25% to 48% for various types of different drugs. This observable decrease in pricing associated with patent expiries is primarily due to generic and lower-priced alternative drugs entering the market that are clinically equivalent to branded drugs, at significantly less cost.
The cancer market segment is expected to experience a significant growth at a higher CAGR during the forecast period. Cancer is one of the top causes of deaths around the world, and the need for effective cancer treatment is increasing.
Oncology drugs are utilized in the treatment of all cancer types including breast cancer, lung cancer, prostate cancer, leukemia, and lymphoma. Accordingly, oncology takes up a substantial portion of the pharmaceutical market. The price of branded oncology drugs creates higher financial pressures on health systems, payers, and ultimately patients.
Generic oncology drugs lessen the costs associated with branded drugs since they have the same clinical effects, but at a substantially lower price. This is particularly important in low- and middle-income countries, where the cost differentiation can be an important factor in access to treatment. Therefore, it is common for payers and health providers to promote use of generic drugs to reduce costs while providing an adequate level of treatment.
The North America’s generics market had the largest revenue share of around 39% in 2024. The U.S. had the largest sales in the North American generics drugs market in 2021. The region's focus on primary healthcare remains centered on the pandemic as it continues to progress through the 3rd year of disruption and death as cases approached 1 million.
However, the other key dynamics related to the utilization of health services, the associated level of spending including out-of-pocket patient costs and utilization of prescription medications are also playing out. Understanding these contributions to the healthcare system and how they may unfold in the years ahead, is critical to stakeholders and decision makers, including patients.
Spending and drivers for growth depict the significant disparity between stakeholder spending levels as rebates and discounts obfuscate these trends even as the most significant factor driving this trend has been the amount spent on COVID-19 therapeutics and vaccines.
NA
NA
NA
Copyright © Transparency Market Research, Inc. All Rights reserved
Trust Online
Non-Retail Generics Market
