For over three decades, generic drug manufacturers have competed based on a simple formula: rapid entry, large-scale production, and cost reduction. According to the Association for Accessible Medicines’ 2026 savings report, generics and biosimilars saved the U.S. healthcare system $496 billion in 2025. However, this formula is now under strain due to consolidation among purchasers, price pressure, and supply chain issues.
The supply chain challenges are evident in the persistent shortages, with the American Society of Health-System Pharmacists (ASHP) reporting 225 active drug shortages as of September 2026. In response, manufacturers are shifting their focus towards reliability, technical complexity, supply resilience, digital manufacturing, and payer-aligned access, in addition to price.
Shifting Focus to Value Advantage
However, purchasing power is concentrated, with three buying groups accounting for nearly 80% of U.S. generic purchases in the retail market, according to a May 2024 submission to the FTC and HHS.
These shortages impose significant costs on hospitals, with a Vizient analysis estimating nearly $900 million in annual U.S. hospital labor costs to manage shortages, based on a survey covering 2023.
A growing share of upcoming patent expiries involves biologics, specialty medicines, and complex formulations, presenting a $232 billion opportunity for biosimilars, according to an IQVIA analysis. Dr. Reddy’s is tracking several major expiries, including abatacept (Orencia) in immunology and daratumumab (Darzalex) in oncology, and is investing in complex biologics, having submitted a BLA for an abatacept biosimilar in December 2025.
Complex Products and Reliability
Complex products, such as depot injections, inhalers, and drug-device combinations, require formulation science, device engineering, and advanced analytical methods. Companies that master these requirements face fewer competitors and slower price decline.
Supply-assurance programs, such as Premier’s ProvideGx program, make dependable supply part of what health systems buy. Manufacturers that report quality maturity indicators, service-level commitments, and risk-mitigation plans can shift the conversation from unit price to total system cost. Dr. Reddy’s is deploying digital twins, advanced analytics, and industrial IoT at its Bachupally site, which has coincided with a 30% reduction in production lead time and a 20% reduction in turnaround time.
As the industry continues to evolve, manufacturers are looking for ways to differentiate themselves and provide value to patients and healthcare systems. The company has committed to reaching 1.5 billion patients by 2030, pairing first-to-file biosimilars with reliability and digital-manufacturing capabilities.
The Biosimilars Council reported that adalimumab biosimilars captured only 2% market share in their first year, despite some list prices being more than 80% below Humira’s. Dr. Reddy’s biologics portfolio includes seven biosimilar products and one novel biologic marketed across multiple countries, with the company preparing for U.S. launch and developing channel-specific strategies.
According to the Biosimilars Council’s summary of the 2026 AAM report, biosimilars saved the U.S. healthcare system $25.4 billion in 2025 and $81.6 billion since their first U.S. market entry in 2015. As the industry looks to the future, manufacturers are focusing on building dedicated complex-generics teams, publishing reliability data, and using process analytical technology to clear manufacturing bottlenecks.
With the right strategy and capabilities, companies can provide value to patients and healthcare systems while remaining competitive in the market.
