With the patent cliff that began in 2011 continuing well into 2016, generic drugs are expected to gain more traction over the coming years. Outsourcing certain aspects of the pharmaceutical drug development process can significantly help bigger pharmaceutical companies that plan to develop generic versions of their off-patent products.
Many of the world’s top-selling drugs have recently lost or are losing their patents over the next few years, creating much anxiety among large pharmaceutical companies. According to market research company IBISWorld, about 130 big-name drugs constituted 34 percent of global sales in 2010, producing a collective $295 billion. Research shows that the rise of generics resulting from the patent cliff is expected to cut the sales of the big pharmaceutical companies by as much as 90 percent.
While these companies are bracing themselves for the financial impact of their patent periods, some experts are recommending that they adopt the generic market model in order to keep abreast with the competition. Given that the drug has already established a track record of effectiveness and safety, innovator companies can still have that edge in the generics industry, should they decide to turn their off-patent drug generic. It will also allow them to reach out to markets they may not have been able to access before.
Because of the staggering financial impact of the patent cliff on innovator companies, they need to adopt more cost-effective measures for moving into generics. One way to do this is by outsourcing certain aspects of the pharmaceutical drug development process, such as commercial manufacturing. Outsourcing allows companies to save significantly on costs while simultaneously benefitting from state of the art facilities, Good Manufacturing Practices, and the expertise of professionals. By outsourcing, they are able to produce excellent quality generics to compete with the rest available on the market without the large capital investment.
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