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Looking for a pharmaceutical industry overview? Let’s start with the world’s biggest pharmaceutical markets, the US and Europe.
All of the biggest pharma companies on Pharmaceutical Technology’s list of the 10 top pharmaceutical companies by market share are located in those two regions.
Although areas like China and India have seen growth in recent years, when it comes to the life sciences space — and in particular the pharma industry — the US and Europe remain on top for pharmaceutical consumption and development. That’s due to potent capital opportunities and expanding demand for products and devices.
In these two locations, healthy and transparent systems allow public companies to bring their products to market after proper vetting. Meanwhile, patents allow the protection of novel candidates and treatments for serious diseases. With that in mind, here the Investing News Network provides a pharmaceutical industry overview, breaking down the two top pharmaceutical regions.
Pharmaceutical industry overview: US
The US dominates the pharmaceutical market, both in consumption and development. In terms of pharmaceutical drugs, pricing remains a constant topic of debate in the country. According to STAT, prescription drug spending in the nation is estimated to add up to US$600 billion by 2023, up from an estimated US$500 billion in 2019.
With Pfizer (NYSE:PFE) holding the number one spot on Pharmaceutical Technology’s list of drug companies, it’s no surprise that Evaluate Pharma predicts this behemoth pharmaceutical company will be the top prescription drug company by 2024. It’s estimated that Pfizer will reach US$51.2 billion in sales, putting it ahead of companies like Novartis (NYSE:NVS) and Roche (OTCQX:RHHBY).
In terms of breakthrough medicinal products, in 2018 the US Food and Drug Administration’s (FDA) Center for Drug Evaluation and Research approved a record 59 novel pharmaceutical products. Most of the products were for rare diseases, including the first drug to treat smallpox and the first treatment for hypophosphatemia. The first cannabidiol-based drug was also approved by the regulatory agency.
As of July 23, 2019, just 13 novel medicines had been approved by the FDA for the year, making 2019 a disappointing year for the market when compared to previous years. That being said, 27 additional novel drug projects are expected to receive some kind of answer before the end of the year.
The US is the world’s leader in research and development (R&D); since 1980, R&D efforts in the country have grown significantly, from US$2 billion to US$71.4 billion as of 2017. Similarly, the country is host to roughly 106,000 registered studies and 19,000 recruiting clinical studies.
US biopharmaceutical companies directly provide jobs to more than 810,000 Americans and indirectly support the jobs of 3.5 million Americans. Overall, the economic output of this work was valued at approximately US$1.2 trillion in 2014, making pharmaceutical manufacturing one of the most important sectors of the US economy. By 2026, it’s expected that the healthcare sector at large will comprise 19.7 percent of the US economy.
A strong intellectual property system that rewards innovation and the improvement of current treatments ensures a supportive pharmaceutical market for public companies, according to a report from the International Trade Administration. “The United States attracts the majority of global venture capital investments in start-up biopharmaceutical enterprises,” the report states.
Pharmaceutical industry overview: Europe
The rest of the 10 top drug manufacturers on Pharmaceutical Technology’s list are enterprises in Switzerland, France, Germany and the UK, including firms like Novartis and Sanofi (NYSE:SNY).
The EU-5 accounts for 69 percent of the European market, so there’s potentially even more growth beyond those five countries. Evaluate Pharma claims that Germany’s pharmaceutical sector is expected to have a market value of 9.7 billion euros by 2022.
Europe is known for innovation as well, and there are many products in the R&D stages right now. In addition, there are new drugs coming out, such as Sanofi’s Dupixent product, which was launched last year and is forecast to be the highest seller in 2022.
Pharmaceutical industry overview: Global outlook
While the US and Europe are the frontrunners in the pharmaceutical market, globally the industry is projected to soar past US$1.5 trillion by 2023. This represents a compound annual growth rate of 3 to 6 percent between 2019 and that time.
Unsurprisingly, the pharmaceutical market in the US will play a key role in the industry’s growth. In terms of spending, over in Japan, the market is forecast to dip due to exchange rates and an increase in generics. However, over in China spending is projected to increase to between US$140 billion and US$170 billion by 2023, up from US$137 billion in 2018.
In terms of which therapeutic areas companies will be most focused on by 2024, oncology will hold top spot, followed by metabolic disorders, the central nervous system, cardiovascular disease, infectious disease, respiratory problems and immunology.