Perspective on the Future of Generics and the Role of Value-Added Formulations

New analysis highlights how improved delivery, patient experience, and formulation science could help strengthen a strained generics market

For decades, generics have served as a cornerstone of affordable healthcare, dramatically expanding access to proven therapies. That success, however, has also created a highly efficient and intensely competitive market where pricing pressure is constant, and margins are increasingly thin, making sustained reinvestment in innovation more difficult.

According to the Association for Accessible Medicines, generics account for roughly 90 percent of U.S. prescriptions but less than 20 percent of total drug spending. At the same time, manufacturers have begun exiting certain categories, and drug shortages have become more common. The American Society of Health-System Pharmacists reported 323 active drug shortages in early 2024, before easing to 214 later in the year.

“These dynamics don’t mean the generics model is broken,” said Altanine’s Chief Executive Officer, Dr. Charles Andres, PhD, JD. “But they do suggest the industry may benefit from broadening the way it thinks about value, beyond price alone.”

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A Complementary Path: Formulation-Led Differentiation

Altanine’s perspective highlights the growing role of value-added medicines, therapies based on known molecules but improved through changes in formulation, delivery method, or usability. These enhancements can improve tolerability, simplify dosing, and support better real-world adherence, without changing the underlying active ingredient.

In some cases, improved formulations may also help extend the usefulness of established molecules into new treatment settings or patient populations, particularly in areas where delivery and tolerability play an outsized role in outcomes, including sexual dysfunction, metabolic, neurological, and endocrinological disorders.

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 “It’s not about reinventing molecules, it’s about refining how patients experience them.”

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The regulatory framework for this approach is already well established. The FDA’s 505(b)(2) pathway allows developers to rely on existing safety and efficacy data while introducing clinically meaningful changes in dosage form, formulation, or route of administration. Compounding can also be a viable path to market.

“Formulation science gives us a way to build on what already works,” Andres said. “It’s not about reinventing molecules, it’s about refining how patients experience them.”

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Why Patient Experience Matters

A growing body of evidence suggests that patient experience and adherence are closely tied to both clinical outcomes and healthcare costs. Non-adherence is estimated to cost the U.S. healthcare system up to $300 billion annually.

Advances in real-world evidence, AI-enabled pharmacokinetic modeling, and patient-reported outcomes are making it easier to identify where reformulation could meaningfully improve how medicines perform in real-world settings, particularly in complex disease areas where tolerability and delivery often limit therapeutic impact.

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