The industry is contending with key patent expirations and pricing pressures amid changing healthcare access and funding issues
Los Angeles, CA (PRWEB) October 13, 2012
Over the five years to 2012, the Global Pharmaceuticals and Medicine Manufacturing industry has enjoyed steady growth despite a number of changes in the industry's landscape. Industry revenue has grown on the back of increased access to more comprehensive healthcare in developing countries and demographic shifts necessitating more healthcare expenditure. “The growing number of middle-class people around the world has also translated into a dramatic increase in demand for pharmaceuticals,” says IBISWorld industry analyst Nima Samadi. “Industry growth has been restrained, however, by the potent combination of a historically high level of patent expirations on blockbuster drugs, accelerating competition from generics and a depleted product pipeline with fewer new medicines making it to market.” Growing price pressures from governments and health insurance organizations throughout the world will also strain the industry.
Global Pharmaceuticals and Medicine Manufacturing industry revenue is expected to grow from $840 billion in 2007 to $1.0 trillion in 2012, representing annualized growth of 4.0%. During the current year, the industry will have to contend with key patent expirations and continued pricing pressures amid changing healthcare access and funding issues. At the same time, emerging pharmaceutical markets (such as China, India and Brazil) will drive industry revenue. Growth from these markets will significantly exceed growth rates in more mature markets, such as the United States and Western Europe, which will have to contend with increased regulation and significant changes in healthcare policy due to various austerity measures and healthcare reforms. Overall revenue is forecast to grow 3.0% in 2012. In recent years, the industry has experienced a marked increase in the level of concentration in line with greater numbers of mergers and acquisitions (M&As). “The high M&A activity was driven by the escalating costs of research and development, shorter exclusivity times while drugs are under patent and the need for global marketing power as brand-name recognition and loyalty escalated, particularly in emerging markets,” adds Samadi. Despite the number of mega mergers in recent years and the perceived dominance of large pharmaceutical manufacturers, the largest major player, Pfizer, controls little of the global pharmaceutical market.
In the short term, the industry is expected to continue its gradual transformation process. Industry participants will continue to adopt new business models as they seek to adapt and survive. Emerging markets will continue to grow in importance as the geographic base of the industry continues to gradually move away from the traditional powerhouses, such as the United States and Western Europe. Meanwhile, diversification strategies and merger and acquisition activity will remain key features characterizing the industry's evolution. Through 2017, industry revenue is projected to grow. For more information, visit IBISWorld’s Global Pharmaceuticals and Medicine Manufacturing industry report page.
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IBISWorld industry Report Key Topics
This industry comprises companies that manufacture biological, medicinal and pharmaceutical products in various forms, including ampoules, tablets, capsules, vials, ointments, powders, solutions and suspensions. The overall pharmaceutical market can be segmented between prescription-based (or ethical) products and over-the-counter medications. The products are predominantly distributed via wholesalers and are then sold via pharmacies or distributed in hospitals.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique industry information and analysis. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.