Having saturated the developed world, operators are turning to emerging nations for growth
Los Angeles, CA (PRWEB) June 04, 2013
Over the five years to 2013, the Global Pharmaceuticals and Medicine Manufacturing industry has enjoyed steady growth despite a number of changes to the industry's landscape. Industry revenue has grown on the back of increased access to more comprehensive healthcare in emerging 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 Anna Son. “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 has also strained the industry.
During the five years to 2013, IBISWorld estimates that Global Pharmaceuticals and Medicine Manufacturing industry revenue will grow at an average annual rate of 3.7% to total $1.1 trillion. In 2013, the industry will continue to be challenged by key patent expirations and continued pricing pressures amid changing healthcare access and funding issues. At the same time, emerging markets, such as China, India and Brazil, continue driving sales of pharmaceuticals. “Growth from these markets is significantly exceeding growth rates in more mature markets, such as the United States and Western Europe, which have to contend with increased regulation and significant changes in healthcare policy due to various austerity measures and healthcare reforms,” adds Son. Overall, revenue is forecast to grow 3.4% in 2013.
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 (R&D), 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. Despite the number of mega mergers in recent years and the perceived dominance of large pharmaceutical manufacturers, major player Pfizer controls only a small percentage of the global pharmaceutical market. Furthermore, less than 25.0% of drugs discovered are brought to market by the big pharmaceutical companies; instead, the bulk comes through small niche companies. During the past five years, there has been a proliferation of small pharmaceutical and biotechnology firms involved in the R&D and manufacture of products in key therapeutic areas. Within individual therapeutic classes, concentration levels may be considerably high, with just one or two players accounting for the bulk of sales. For prescription pharmaceuticals, generics or over-the-counter products, a low concentration exists.
In the short term, the industry is expected to continue its gradual transformation process. Emerging markets will continue to grow in importance as the geographic base of the industry continues to move away from the traditional powerhouses. Meanwhile, diversification strategies and merger and acquisition activity will remain key features characterizing the industry's evolution. In addition, large-cap pharmaceutical firms will seek to acquire or partner with biotechnology companies with promising drug candidates to bolster their thinning pipelines. 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on nearly every US and Global industry. 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.