Global Pharmaceutical Industry Overview
The pharmaceutical industry consists of companies involved in the research, development and marketing of drugs and biologics.
The pharmaceutical market was valued at $1 trillion in 2013, according to IMS. The market grew at a 4% compound annual growth rate (CAGR) from 2009 to 2013. It grew well in 2010 and 2011 before a decline in growth in 2012 and 2013.
The pharmaceutical market was driven by a rise in healthcare spending and high growth in both emerging markets and the biologics segment. In 2013, cancer was the largest segment, accounting for 7% ($67 billion) of the global industry. This was closely followed by the pain and diabetes segments with shares of 6% and 5% respectively, according to IMS.
Key International Markets
- North America was the largest market in 2013, with revenues exceeding $340 billion.
- This was followed by Europe with revenues of $224 billion according to IMS.
- Emerging countries in Asia and Latin America are forecast to grow rapidly. Increase in spending in these countries will be driven by rising incidence of disease, favorable government policies and improving healthcare infrastructure (and the multiplication of drug stores and pharmacies in large cities.
Pharmaceutical Key Players
Novartis was the pharmaceutical market leader in 2013 (thanks to a state-of-the-art drug discovery and development department) with revenues of $51 billion and a market share of 5%. Primary contributors to its sales were the drugs Gilenya and Affinitor. In 2014 Novartis is expected to file 10 new drugs with the U.S.’s Federal Drugs Administration (FDA). Pfizer was close behind Novartis with a 4% shareof the global market according to IMS. Pfizer too is expected to file six new drugs with the FDA in 2014.
The top ten players are forecast to collectively lose share from 35% in 2013 to 30% in 2017, according to IMS. Patent expiries over the next few years will eat into the revenues of most companies during this period.
Sanofi potential loss due to patent expiries is estimated to reach up to $8.1 billion. The company is then followed by Novartis, Roche, Astra-Zeneca and Eli Lilly with respectively potential losses of 7.7, 7.2, 6.7 and 6 billion dollars.
Pharmaceutical Sales Forecast
Pharmaceutical industry trends show that the global market is set to show steady growth in the next five years at a CAGR of 4-5%. Innovative on-prescritpion drugs and over-the-counter drugs entering the market and biologics such as targeted therapies for cancer will be key in driving growth.