u.s.genericdrugindustryandindianpharmaceutical.docVIP

U.S. Generic Drug Industry and Indian Pharmaceutical Companies Jiny Kim April 26, 2004 Indian pharmaceutical companies are already well positioned into some of the generics pharmaceutical markets of developed nations. However, the smaller companies have yet to fully take advantage of this enormous opportunity presented by the generics pharmaceutical market. This paper attempts to evaluate the generics pharmaceutical market in the U.S. and the potential opportunity that exists for Indian pharmaceutical companies, the current market roles played by the larger Indian pharmaceutical companies, and most importantly, how smaller Indian pharmaceutical companies can take advantage of the giant market. Pharmaceutical Industry in the U.S Although the pharmaceutical industry has always been an important part of the total health care system in the U.S., the industry is becoming increasingly important in the recent years due to the attention it has received from the government and the private sector. Prescription drug spending and utilization in the U.S. has increased rapidly in recent years. According to the Kaiser Family Foundation’s report on prescription drug trends, U.S. spending for prescription drugs was $140.6 billion in 2001, which represents more than a three-fold increase since 1990. The National Institute for Health Care Management Foundation (NIHCM) reported that overall spending on prescription drugs in the U.S. increased 17.1% from 2000 to 2001. Spending on prescription drugs now represents 10-11% of health care expenditures in the U.S. There are three main factors driving the increases in prescription spending as mentioned in the NIHCM study: 1) The increasing number of prescriptions (utilization) 2) Changes in the types of drugs used 3) Manufacturer price increases for existing drugs In addition, according to GAO, part of the increase is attributed to growth in the number of patients diagnosed with conditions that can be tre