The health departments of various Government worldwide are under pressure to cut costs and reduce healthcare expenditure. In many countries, the generic solution has been seen as a way to assist this cost-cutting exercise. The United States is the biggest generic drug market. It is followed by Europe, which is dominated by Germany, the United Kingdom, Denmark, and the Netherlands. However, the generic drug market is spreading on a global scale.
Price is the major competitive factor of a generic product.
However, as more generic products enter a given market, their prices are reduced to one-fourth of its original patented version, and hence their profit margins, decrease and competition thereafter is based primarily on quality of product, packaging and service to intermediaries. But a handful of companies have large enough resources to be able to finance such activities. Consequently, large pharmaceuticals majors are buying a number of generic-only companies. Alliances and joint ventures , several generic companies are entering into JVs and making acquisitions to increase their product portfolio. There are opportunities for generics to complement existing product lines in specific disease categories.