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Disruption Hits the Generic-Drug Industry in Europe

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Powerful, disruptive forces are upending the European generics industry and shifting the center of gravity away from standard drugs. Read the full report, here: http://on.bcg.com/1uhI5mA

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Disruption Hits the Generic-Drug Industry in Europe

  1. 1. From 2014 through 2020, two-thirds of drugs losing patent protection (measured in terms of sales in euros) will be specialty drugs and biologics. DISRUPTION HITSThe Generic-Drug Industry in Europe Generics industry fragmentation Unprecedented price pressure Increasingly powerful distributors and pharmacy chains Barriers to growth of generics including stiff competition from originators The pressure is unlikely to let up – 4 forces are weighing on the industry In the 6 markets we studied, 70% of generics industry profits will come from specialty drugs and biosimilars in 2020, up from 51% in 2012. The center of gravity is shifting from standard generics to specialty drugs and biosimilars % in  Spain UK Germany Pola nd Italy France % in  The median return on capital for 8 leading U.S. and European generics players fell from 7.5% in 2011 to 6.7% in 2013. At these levels, returns are not covering the industry’s estimated cost of capital of around 9%. This shift will take place amid a challenging environment . % % in  in  . PATENT PATENT PATENT The specialty drug and biosimilar segments are growing rapidly Read BCG’s latest insights, analysis, and viewpoints at bcgperspectives.com © The Boston Consulting Group, Inc. 2014. All rights reserved. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcgperspectives.com. Please direct questions to socialmedia@bcg.com.

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