The growth in the global sales of generics has dived to 3.6% in 12 months – down from 11.4% in 2007, a new report says.

IMS Health’s annual Global Generics Perspective report found that global generics products generated $78 billion in audited sales in the 12 months through to September reflecting the changing industry dynamics that are also affecting branded pharmaceutical products.

“The global generics market has posted double-digit gains in recent years. But in 2008, despite robust volume increases, we are seeing the first significant decline in sales growth as manufacturers increasingly compete in fierce price battles within most of the world’s major markets,” said Murray Aitken, Senior Vice President, Healthcare Insight, IMS.

“This trend is very apparent in markets like the US and UK as generics companies contend with aggressive competition and cost-containment measures enforced by both private and government payers.”

The US is the world’s largest generics market but experienced a 2.7% sales decline in the 12 months to September to $33 billion while volume increased 5.4% during the same period. Generics products now account for 63.7% of the total US pharmaceutical market.

While the USA saw a drop in generics sales, Japan, France, Italy and Spain saw generics sales rise by more than 10% each for the indicated 12 months.

The report noticed several trends including: a more divided generics industry between large and high-performing companies and smaller ones as larger companies consolidate and expand; while generics companies will benefit with the number of branded drugs going off patent in 2012, growth for the industry will be small with fewer branded blockbusters being developed; new distribution models may reduce the incentive for pharmacies to promote the use of generics; there is going to be increasing competition from biosimilars.

“Through this decade and next, we expect the distinction between R&D-based pharmaceutical manufacturers and generics companies to blur,” said Alan Sheppard, Director of Generics at IMS.

“Many of the largest R&D companies have stated their intention to expand their generics businesses to compensate for slower growth in the branded sector. At the same time, large generics manufacturers are looking to capitalise on their development expertise and technology to produce new chemical entities and establish their own R&D businesses. This will give leading generics companies an advantage in building market share over many smaller local manufacturers.”