German generics market is the biggest in Europe in terms of values and units. It is also one of the most dynamic and with the largest number of companies operating. Parallel trading is strongly promoted and as a result, highly specialized companies with very tight and effective commercial structures are competing with big global manufacturers sometimes with a high success rate in tenders and in the private sector.
Emergpharma has recently started to publish preliminar data from its “German generic and biosimilar market 2016-2018” report, showing interesting conclusions. Next, we briefly discuss some of them.
Large number of competitors, although following Pareto's law
Comparing the data with other EU markets, German shows a higher number of companies that commercialize generics. According to the report, 98 companies are reporting selling 907 molecules & combinations. However, 20 of these companies accounted for 80% of the market in values and more than 90% of the units sold. This data keeps consistent during the 3 years period.
Market remains stable in units and grows slightly in values
In general terms, the market records annual growths around 1% in units and 4% in values, with a very small number of new molecules (less than 1% of the total).
Boom of Indian companies
A group of 10 Indian companies have been consistently gaining MS the last 4 years at a rate of 1% yearly, having reached 10% of the market in units. With different business models and focus on different therapeutic areas, all of them showed similar patterns in how to address the market. They learned to take advantage of their competitive advantages such as low COGS, lax system of protection in India that allows them to start their development before and gain a few months or years of advantage, executives with experience and management of the English language, etc. Although there are other good performers to consider, as Aristo Pharma, Indian companies as a group represent a significant share of the growth between 2016 and 2018.
Significant loss of market share of "classic" companies
During the period considered, large generic companies such as Teva, Sandoz, Zentiva, Mylan, KRKA or Stada have been losing market share, both in terms of values and units, in some cases above 1.5%.
Therapeutic segments growth drivers
In values, central nervous system (CNS), cardiovascular, oncological / immunosuppressive products and anti-infective are the four leading growth categories, followed by respiratory system, vitamins, skeletal muscle and dermatology. In units, six groups grew: cardiovascular, central nervous system, respiratory system, antiparasitic, urological and non-sexual hormones.
Therapeutic segments losing sales
Gastro, antidiabetics and blood products are the only groups that decrease in values, while in units they do digestive, skeletal muscle, anti-infectious, dermatological, blood products and antidiabetics.
Market by molecules also follows the 20/80 rule
209 molecules of 907 are selling 80% of the market in values (year 2018) and represent 95% of the total growth in values.
Price dynamics
In general, OTC products (non-prescription products) increased their average prices above 10% in the period considered, while prescription generics are on average 6% cheaper, although there are important differences by category and depending on the number of competitors. Highlights the significant erosion in prices of some of the molecules recently approved as imatinib that has reached discounts on the price of the originator above 85% in some big tenders. The report shows a market with small growth and a relatively modest number of new molecules. Price erosion is becoming faster in the last years, but also depending on the number of competitors: when 3 or less, seems to be around 60 to 70%, then increases dramatically and finally stabilizes when more than 8 to 10 competitors enter the scene.
Biosimilars
To mention the incidence of biosimilars in the market dynamics. Although they have been included in the study, as following a totally different pattern than generics, Emergpharma decided to carry out a specific report on them. Results will be commented in next posts.