US Pharm. 2012;37(8):54.

Government initiatives to cut health expenditures are likely to encourage sales of generic medications in Europe, according to a new report by the business research firm GBI Research. The new report, entitled Active Pharmaceutical Ingredients (API) Market in Europe to 2017, predicts that generics will increase in revenue in the region during the next 5 years, as cost-containment policies strongly support the consumption of generic drugs over the use of innovative drugs.

API derived from biotechnology—known as biosimilars, generic biotech API, or follow-on biologics—provide high-growth market potential. However, they are expensive to develop and manufacture compared to the production of regular small-molecule generic API, according to the report.
France, Germany, and the United Kingdom have all tightened their health care budgets to tackle the economic crisis, resulting in pressure to reduce pharmaceutical prices. However, while reimbursement cuts are expected to decrease the use of innovative drugs and hinder API revenue, it appears that API generics will remain popular, according to the report.

The expiration of patents for major blockbuster drugs and the entry of low-priced generic versions are expected to increase the consumption of generic drugs, with the weak pipelines of major pharmaceutical companies amplifying this trend. With many patent expirations occurring during 2010-2012, generic consumption is expected to peak and, in turn, to increase the competition between pharmaceutical producers.