Special Report: Blockbuster death and growth of generics

When a new drug is developed, the pharmaceutical company that discovers it receives a patent, usually for about 20 years. This gives the original company time to make back the money that it spent on R&D for the drug.

If you like, the patent serves as the ‘incentive’ for pharmaceutical companies to take risks and spend lots of money on developing drugs. And remember that the cost of bringing a new drug to the market is over $1 billion – if they were unable to secure profit, how would a pharmaceutical company justify the cost of R&D?

Global spending on medicines is anticipated to reach nearly $1.2 trillion by 2016, IMS reports.

A report was released by the IMS ten days ago stating that the global market for medicines is expected to pick up again from an expected low 3-4% growth in 2012 to 5-7% in 2016. However, sales in the US, Europe and Japan are expected to decrease significantly. It is the emerging markets that are set to provide the bulk of this growth.