Industry Report – A True Growth Industry, Generic Pharmaceuticals
Jennifer Nietz - Manager of Operations
June 2013 – Our work at COACT requires a significant amount of industry research, and as the Operations Manager, I have been directly involved in market research strategy for many of our client campaigns. During this time, I have reviewed and researched multiple markets – some mature, featuring slow growth in very large markets, featuring consolidation and increased efficiencies. For one of our clients, I have recently investigated an industry with a very different outlook – generic pharmaceuticals.
The generic pharmaceutical industry is going to continue to experience rapid growth over the next five years, as it has over the past five. One of the main reasons for this projected continued growth is that many major drug patents will soon be expiring; increasing competition, lowering prices and increasing demand. Since patent expirations have decreased both revenues and profits for brand name manufacturers, it has caused these manufacturers to decrease their spending for research and development efforts.
The generic pharmaceutical market will also benefit from some of the major changes in healthcare reform, as there will be an increase in coverage of prescription medications. IBIS World is predicting that the annual rate of growth over the next five years will be 6.4%.
So who are they, and where can you find them?
The Midwest is a heavily saturated area for generic pharmaceutical manufacturers. However, there are two additional areas you will want to keep your eye on and that are the Mid-Atlantic and West regions. States in the Mid-Atlantic region attract these manufacturers due to specially designed programs to boost growth.
The chart below illustrates revenue vs. population and revenue vs. establishments:
The work we do for our clients is heavily concentrated in identifying growth industries and decision makers in those industries. This is an industry I am recommending to our clients that have products or services that help these organizations with material management, corporate organization, design and/or engineering, and packaging.