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Home About Generics FAQs

Frequently Asked Questions

For Consumers | For Analysts/Researchers

What is the expected growth of the generics market in the near future?
According to IMS Health, the generic industry is growing at more than 7%, a pace that is faster than the world pharmaceutical market. Fueling continued growth will be the strong utilization of generics through the Medicare prescription drug benefit (Part D), an aging population needing affordable medicines, and more than $50 billion in brand products that will be coming off patent during the next few years.

How has the U.S. market grown?
In 2007, U.S. manufacturer sales of generics reached $58.5 billion. Total 2007 U.S. pharmaceutical manufacturer sales -- for brand and generics -- were $286.5 billion. [Source: IMS Health]

What is the generic substitution rate?
65% of all prescriptions dispensed are generics, yet they only account for 20% of all pharmaceutical expenditures. Generics cost, on average, 30% to 80% less than their brand counterparts.

How are drug prices affected when generics enter the market? 
“Tabulations of average retail prescription prices in 1994 show that the average price of a generic drug does decline as the number of manufacturers and distributors of that drug increases. For example, the average prescription price of a generic drug with one to five manufacturers ($23.40) is more than that of a drug with 16 to 20 manufacturers ($19.90). CBO's retail pharmacy data set covers 112 innovator drugs that in 1994 were also available in generic forms sold under their chemical name. 

Comparing the average generic prescription price with the average innovator price for the same drug also shows prices falling as the number of generic manufacturers rises. When one to 10 generic manufacturers are in the market, the generic retail prescription price averages 61 percent of the brand-name price. When 11 to 24 generic manufacturers are in the market, the generic retail price averages less than half of the brand-name price.” [Source: July 1998, CBO: How Increased Competition from Generic Drugs Has Affected Prices and Returns in the Pharmaceutical Industry]

How many generic companies are there? U.S. and worldwide?
There are roughly 50 U.S.-based finished-dose form manufacturers of generic pharmaceuticals. The generic industry employs tens of thousands people. 

The top five U.S. corporations by unbranded generic prescriptions dispensed are Teva Pharmaceuticals USA, Mylan Inc., Novartis (Sandoz), Watson Pharmaceuticals, and Barr Laboratories, Inc., respectively. [Source: IMS Health, National Sales Perspective and National Prescription Audt, Nov. 2007.]

What generics have been approved recently?
Since there is a lag time after generic products are approved and they appear in the Orange Book, you can review the most recent monthly approvals on the FDA's "First Generics" listing.