Understanding the Global Pharmaceutical Market

Summary

Although the origins of the modern pharmaceutical industry can be traced back to the late nineteenth century, the real development started only in 1960s due to some significant new discoveries with permanent patent protection. Next couple of decades saw tightening of regulatory control in the sector all across the world. It was during this period that drugs got laws for patent protection, leading to the appearance of generic drugs. The introduction of generics was very beneficial for society as the valuable medicines became extremely cheap. 1980s and 1990s saw the introduction of venture capital in the pharma and biotech industries. Due to worldwide reforms in the healthcare sector, several regulations were passed to control the pricing of the drugs and deliverance of genuine product innovation. By the turn of the century, all the leading drugcompanies were spending reasonable amount of their revenue in research and development (R&D).

Today, the global pharmaceutical industry is more than $550 billion and has grown at CAGR of more than 6% in last 5 years. Geographically, North America is the biggest pharmaceutical market with a share of almost 48%, followed by Europe (30%) and Japan(9%). Around 20% of all retail prescriptions filled today are related to Medicare Part D, of those, only 31% are for branded drugs; rest are filled by generics. Oncology is the fastest-growing sector in pharmaceuticals, driven by the enormous amount of innovation coming into the market and the enormous unmet need by patients. The number of drugs available, both to improve and maintain life, has steadily risen over the last century. At the present time there are over 1,000 drugs under development, with companies diverting increasingly large proportions of their revenue streams into R&D, the primary driver of competitiveness in the industry.

Having traditionally enjoyed strong growth rates, the industry's operating environment is becomingly increasingly complex. Volume growth is, currently, negligible, the primary driver of industry value being rising per-unit values, whilst the rise of generics is eroding sales growth. Under these circumstances, the global pharmaceutical market is expected to show slightly slower growth incoming years and is predicted to be in the range of $735 billion to $745 billion by the end of 2008.

In recent years, pharmaceutical companies in Asia, particularly in China, South Korea and India, have been a success due to their ability to retain their cost advantage while matching the quality standards of the west. Despite an impressive growth, foreign drug makers are particularly concerned with issues on corruption, governmental bureaucracy and intellectual property (IP) protection in these countries. These issues are important particularly when growing drug counterfeiting activities pose a major global public health risk as well as a financial and reputation threat to pharmaceutical manufacturers. Further, there are healthcare concerns especially in Asia, that has the largest growing number of diabetes patients and WHO's studies show that the number of diabetes affected people may grow by more than 90% over the next 20 years. Drug pricing pressures are challenging the pharmaceutical industry like never before, with governments resorting to drug price controls and other measures to manage spiraling pharmaceutical costs.

This report on the Global Pharmaceutical Market looks at the entire pharmaceutical industry, covering its segments, the technologies making waves, leading players taking the industry forward, and much more. An analysis of the key markets boosts the report from an investor's point of view, and the general basic knowledge about the pharmaceutical industry is beneficial to anyone in the industry.

Contents

• Executive Summary
• Basics of the Industry
  • Industry Definition
  • Lifecycle of a Drug
  • Patent System
  • Drug Lifecycle
  • Drug Discovery
  • Development
  • Industry Cost Structure
  • Types of Costs
  • Pricing and Investment
• Overview of the Global Pharma Industry
  • Background
  • Industry Analysis
  • Industry Size
  • Industry Segments
  • Geographic Distribution
  • Competitive Analysis
  • Market Outlook
• Innovations in the Pharma Activities
  • Global Distribution of Activity
  • Innovation in Value Chain
  • Off-Shoring Pharmaceutical Activities
• Key Markets
  • Europe
  • Belgium
  • France
  • Germany
  • Spain
  • Switzerland
  • United Kingdom
  • Asia-Pacific
  • Australia
  • China
  • India
  • Japan
  • South Korea
  • North America
  • United States
  • Canada
• Profiles of Major Players
  • Abbott Laboratories
  • Astellas Pharma Inc
  • AstraZeneca Plc
  • Australian Pharmaceutical Industries (API)
  • Bayer AG
  • Bayer Schering Pharm
  • Bristol Myers Squibb Co
  • Cerep SA
  • Cipla Ltd
  • Daewoong Pharmaceutical
  • Dong-A Pharmaceutical
  • Eli Lilly & Co
  • GlaxoSmithKline Plc
  • Harbin Pharmaceutical Group
  • Johnson & Johnson
  • Livzon Pharmaceutical Group
  • Merck Group
  • Novartis AG
  • Pfizer Inc
  • Ranbaxy Laboratories Limited
  • Roche AG
  • Sanofi- Aventis
  • Schering-Plough Corporation
  • Sigma Pharmaceutical Ltd
  • Takeda Pharmaceutical Co
  • Wyeth
• Appendix and Glossary
• List of Figures
• Figure 1: Diagram of Lifecycle of a Drug
  • Figure 2: Trends in R&D to Sales Ratio
  • Figure 3: Global Pharmaceutical Industry - Market Value (2002-2006)
  • Figure 4: Global Pharmaceutical Industry Share by Therapeutic Areas (2005)
  • Figure 5: Breakdown of Global Pharmaceutical Market(2006)
  • Figure 6: European Pharmaceutical Industry
  • Figure 7: Belgian Pharmaceutical Industry
  • Figure 8: French Pharmaceutical Industry
  • Figure 9: German Pharmaceutical Industry
  • Figure 10: Number of Pharmaceuticals in Germany
  • Figure 11: Spanish Pharmaceutical Industry
  • Figure 12: Swiss Pharmaceutical Industry
  • Figure 13: UK Pharmaceutical Trade
  • Figure 14: Pharmaceutical R&D Expenditure in the UK
  • Figure 15: Australian Manufacturing Industry Sales
  • Figure 16: Breakup of the Chinese Pharmaceutical Market
  • Figure 17: Indian Pharmaceutical Market
  • Figure 18: Indian Pharmaceutical Industry by Therapeutic Areas
  • Figure 19: U.S. Pharmaceutical Industry by Sales
  • Figure 20: U.S. Pharmaceutical Industry by Type of Drugs
  • Figure 21: Canadian Pharmaceutical Market Sales
  • Figure 22: Timeline of Drug Innovation
  • Figure 23: Changes in Research Sites (2001-2006)
  • Figure 24: Worldwide Major Vaccine Manufacturers Market Value (million)
  • Figure 25: New Chemical and Biological Entities (1986-2005)
  • Figure 26: Allocation of R&D Investments by Function (%)
• List of Tables
• Table 1: Industry Sponsored Global Trial Sites by Region
  • Table 2: Business Expenditure on Pharmaceutical R&D by Country
  • Table 3: Top 10 Products by U.S. Dispensed Prescriptions
  • Table 4: Leading Products by Global Pharmaceutical Sales (2006)