The global market for generic medicines – which refer to cheaper alternatives to brand-name drugs that contain the same active ingredients – has been declared “broken” multiple times in recent memory.
Tip style
Value
Risk rating
Medium
Timescale
Medium Term
Bull points
- High margin
- Expertise in complex manufacturing
- Demographic trends supporting demand
- More predictable than pharma giants
Bear points
- Constant pricing pressure
- Volatile conditions in the Middle East
- No obvious share price catalysts
Manufacturers have been plagued by supply chain and quality control issues, leaving many patients around the world without easy access to their prescriptions. Intense price competition, especially in the US, has also driven profit margins down and forced some producers out of the business altogether.