U.S. Generic Drugs Market Size to Surpass USD 188.44 Bn by 2032

According to recent study by nova one advisor, the U.S. generic drugs market size is projected to surpass around USD 188.44 billion by 2033 from USD 133.59 billion in 2023 and is expanding at a CAGR of 3.5% between 2024 to 2033.

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The growth of the U.S. generic drugs market is primarily driven by its cost-effectiveness, which stems from the streamlined regulatory pathway facilitated by the FDA. Different from brand-name drugs, generics are spared the substantial expense of replicating original clinical trials for efficacy and safety.

U.S. Generic Drugs Market Overview

In the landscape of the U.S. generic drugs market, the generic drug segment stands out as a key driver of rapid growth and widespread accessibility. The FDA has consistently prioritized the regulation and promotion of generic drugs, recognizing their pivotal role in enhancing public health outcomes.

Competition among generic drug manufacturers has been instrumental in expanding the availability of medications while driving down costs, facilitating easier access for millions of patients nationwide. The approval of generic alternatives often results in a diversified pool of manufacturers for a given drug, bolstering supply stability and mitigating the risk of shortages. With an estimated 91% of all prescriptions in the United States being filled with generic drugs, the market has witnessed a significant penetration of these cost-effective alternatives. The FDA's approval of over 32,000 generic drugs underscores the breadth and depth of this segment's contribution to healthcare accessibility.

  • In February 2024, Alvotech and Teva announced the U.S. approval of SIMLANDI (adalimumab-ryvk) injection, the first interchangeable high-concentration, citrate-free biosimilar to Humira.

U.S. Generic Drugs Market Key Takeaways:

  • By type, the pure generic drugs segment accounted for the largest market.
  • By route of administration, the oral segment contributed to the biggest market.
  • By therapeutic application, the cardiovascular segment captured more market share.
  • By Distribution channels, the online pharmacies accounted largest revenue share.

Generic Drugs Market in the global 2024 to 2033

The global generic drugs market size was exhibited at USD 465.19 billion in 2023 and is projected to hit around USD 779.68 billion by 2033, growing at a CAGR of 5.3% during the forecast period 2024 to 2033.

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U.S. Generic Drugs Market Dynamics

Driver

Maximizing Savings

The utilization of generic drugs emerges as a pivotal driver of value within pharmacy benefits, benefiting both drug benefit plan sponsors and beneficiaries. With generic drugs costing significantly less—typically 30% to 80% lower than their brand-name counterparts—cost-savings are realized without compromising on safety or efficacy. As the availability of generic drug therapies continues to expand, it curtails the growth rate of prescription drug expenditures. This winning strategy, initiated when brand-name drugs go off patent, not only fosters cost-efficiency but also fuels the growth of the U.S. generic drugs market, marking a transformative shift in pharmaceutical consumption patterns.

 Restraint

Challenges in Generic Drug Manufacturing

The manufacturing of generic drugs encounters formidable hurdles, characterized by intense competition and razor-thin margins. External factors such as supply chain disruptions, regulatory bottlenecks, and shifting competitive dynamics exacerbate financial strains, rendering certain generics economically unviable. These challenges escalate the risk of drug shortages, while the long-term viability of generic manufacturing faces existential threats. Amidst declining prices, consolidating purchasers, and limited adoption by payers, the growth potential of the U.S. generic drugs market is stifled. As registered manufacturing sites dwindle, the industry grapples with profound constraints that demand strategic interventions to ensure sustainability and resilience.

Opportunity

Advancing Generic Drug Development

Opportunities abound to accelerate the development and approval of generic products, while upholding rigorous standards for quality, safety, and efficacy. Leveraging quality by design principles presents a pathway to craft bioequivalent products efficiently, particularly through the expansion of Biopharmaceutics Classification System (BCS) waivers and improved bioequivalence methods for highly variable drugs. Additionally, enhancing the science behind quality by design facilitates the development and manufacture of generic drug products with precision. Moreover, streamlining the assessment of bioequivalence for systemically acting drugs, including those employing complex delivery technologies, promises greater efficiency. Another frontier lies in developing robust methods for assessing bioequivalence of locally acting drugs, such as topical and inhalation products, unlocking fresh avenues of growth within the U.S. generic drugs market.

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Report Highlights                              

By Brand

In U.S. generic drugs market, the pure generics segment reigns supreme, capturing a dominant share. Pure generics stand out for their affordability, attributed to the streamlined development process that bypasses the need for replicating original clinical trials for efficacy and safety. This cost advantage significantly reduces the barriers to entry, enabling manufacturers to bring drugs to market swiftly and at lower costs compared to their branded counterparts. As a result, pure generics continue to resonate strongly with consumers and healthcare providers alike, driving their widespread adoption and solidifying their position as the cornerstone of pharmaceutical affordability and accessibility.

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In the U.S. generic drugs market, the branded generic drugs segment emerges as the fastest-growing category. Branded generics, akin to their name, offer a unique blend of familiarity and affordability, representing generic drugs marketed under a proprietary brand name by either generic drug companies or the original manufacturers post-patent expiration. Despite their generic nature, branded generics may not always be as cost-effective as true generics, given their branded identity. This branding strategy can sometimes lead consumers to misconstrue branded generics as superior products, potentially impacting their purchasing decisions. Nonetheless, the appeal of branded generics lies in their ability to combine the assurance of a trusted brand name with the economic advantages typically associated with generic medications, thus driving their rapid expansion within the market.

By Route of Administration

In the pharmaceutical formulations, the oral administration segment stood as the dominating one in 2023. This prevalence can be attributed to several key advantages, including the convenience of administration, patient preference, cost-effectiveness, and the scalability of manufacturing oral dosage forms. Notably, around 60% of established small-molecule drug products commercially available are administered orally, underscoring the enduring popularity and significance of this route of administration within the pharmaceutical industry.

The market for advanced topical products is poised for significant growth in the forthcoming years. This anticipated growth of stems from the increasing recognition and adoption of topical medication administration, wherein drugs are applied directly to the skin or mucous membranes to facilitate absorption into the body. Topical medications offer targeted treatment for specific areas of concern, including pain management and localized therapeutic interventions. As consumer demand for non-invasive, site-specific treatment options continues to rise, advanced topical products are expected to play a pivotal role in meeting these evolving healthcare needs, thereby driving expansion within the pharmaceutical industry.

 By Therapeutic Application

The cardiovascular segment led the U.S. generic drugs market in 2023. Many blockbuster drugs used to treat cardiovascular diseases have lost patent protection in recent years, leading to the entry of generic alternatives into the market. Generic versions of popular medications such as statins, beta-blockers, and ACE inhibitors offer cost-effective alternatives for patients and healthcare providers.

Regulatory initiatives such as the Generic Drug User Fee Amendments (GDUFA) aim to expedite the approval process for generic drugs, making it easier for manufacturers to bring generic versions of cardiovascular medications to market. This has resulted in a greater availability of generic options for patients and increased competition among manufacturers. Given the rising healthcare costs in the United States, there is growing emphasis on cost containment strategies. Generic drugs are typically more affordable than their brand-name counterparts, making them an attractive option for both patients and healthcare payers.

By Distribution Channels

In the distribution landscape of generic drugs, the retail pharmacies segment emerged as the primary channel, holding a prominent position in facilitating accessibility to these medications. It serves as pivotal intermediaries, supplying and retailing a wide array of medicines and medical-related products to both the general public and medical practitioners. Retail pharmacies offer ancillary goods such as toiletries, cosmetics, photographic items, and veterinary products, further solidifying their role as comprehensive healthcare providers. With their widespread presence and established customer trust, retail pharmacies play a crucial role in ensuring the widespread availability and accessibility of generic drugs, thereby contributing significantly to the overall healthcare ecosystem.

In the pharmaceutical distribution, online platforms have emerged as a prominent and increasingly popular channel, driven by technological advancements and changing consumer preferences. E-pharmacies, facilitated by the convenience of the internet, have witnessed a surge in demand as customers increasingly expect mail-order options from pharmacies of all sizes. This trend has led to a growing number of licensed pharmacists transitioning to the digital space, leveraging advancements in internet technology and security protocols. By embracing e-prescribing systems, pharmacists are not only meeting customer expectations but also tapping into a lucrative income stream. As a result, businesses are adapting to this shift by capitalizing on the opportunities offered by online distribution channels, thereby reshaping the traditional pharmacy landscape.

Recent Developments

  • In March 2022, Teva announced the launch of the first generic version of Revlimid (lenalidomide capsules) in the U.S.
  • In July 2023, Amneal launched an authorized generic for Xyrem (sodium oxybate) and received FDA approval for five complex generics in the second quarter.
  • In February 2024, the Biden-Harris administration made the first offer for the Drug Price Negotiation Program and launched a new resource hub to help people access lower-cost drugs.
  • In February 2024, the FTC and HHS launched an investigation into the role of GPOs and wholesalers in ongoing generic drug shortages.

U.S. Generic Drugs Market Top Key Companies:

  • Pfizer Inc
  • Teva Pharmaceuticals USA, Inc
  • Aurobindo Pharma USA, Inc
  • Sun pharma Inc
  • Abbott Laboratories Inc
  • Lupin Pharmaceuticals, Inc
  • Mylan
  • Dr. Reddy’s
  • Novartis
  • Eli Lilly company

U.S. Generic Drugs Market Report Segmentation

This report forecasts revenue growth at country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the U.S. Generic Drugs market.

By Drug Type

  • Simple Generics
  • Super Generics

By Brand

  • Pure Generic Drugs
  • Branded Generic Drugs

By Route of Administration

  • Oral
  • Injection
  • Cutaneous
  • Others

By Therapeutic Application 

  • Central Nervous System (CNS)
  • Cardiovascular
  • Infectious Diseases
  • Musculoskeletal Diseases
  • Respiratory
  • Oncology
  • Others

By Distribution Channels

  • Retail Pharmacy
  • Hospital Pharmacy
  • Online and Others

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