The pharmaceutical industry is concentrated in the US and Europe, and the 10 biggest drug companies are located in those regions. Check out this pharmaceutical industry overview.
Looking for a pharmaceutical industry overview? Let’s start with the world’s biggest pharmaceutical markets, the US and Europe.
Most of the biggest pharma companies on Proclinical’s list of the 10 top pharmaceutical companies by revenue are located in those two regions.
Areas like China and India have seen growth in recent years, but when it comes to the life sciences space — particularly the pharma industry — the US and Europe remain on top for consumption and development. That’s due to potent capital opportunities and demand for products and devices.
In these two locations, healthy and transparent systems allow public pharma companies to bring their products to market after proper vetting, and patents protect 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 pharma market and trends, both in demand and drug development. Researchers from RAND estimate that the US accounts for 58 percent of drug sales, but only 24 percent of sales volume out of all the Organization for Economic Co-operation and Development nations the firm studied.
In terms of pharmaceutical drugs, pricing remains a constant topic of debate in the country. Forbes states that according to a US House Ways and Means Committee report, prescription drug spending in the country exceeds US$500 billion a year and is growing at a rate that is three times that of inflation.
Six of the top 10 drug companies on Proclinical’s list are headquartered in the US — AbbVie (NYSE:ABBV) ranks number three, Johnson & Johnson (NYSE:JNJ) holds the number four spot, Merck (NYSE:MRK) comes in at number five, Pfizer (NYSE:PFE) is in the sixth spot, Bristol-Myers Squibb (NYSE:BMY) ranks seventh and Amgen (NASDAQ:AMGN) rounds out the top 10.
In terms of breakthrough medicinal products, in 2020 the US Food and Drug Administration’s Center for Drug Evaluation and Research approved 53 novel pharmaceutical products. Many of the products were for cancers, including breast cancer, prostate cancer and lung cancer. The first COVID-19 treatment, remdesivir, was also approved by the regulatory agency.
The US is the world’s leader in pharmaceutical sector research and development (R&D), and since 1980 R&D efforts in the country have grown significantly, rising from US$2 billion to US$72.4 billion as of 2020. Similarly, the country is host to roughly 126,364 registered studies and 20,472 recruiting clinical studies.
A strong intellectual property system that rewards innovation and the improvement of current treatments ensures a supportive pharmaceutical market for public companies, as per a report from the International Trade Administration. “The United States attracts the majority of global venture capital investments in start-up biopharmaceutical enterprises,” the document states.
Pharmaceutical industry overview: Europe
Three of the 10 top drug manufacturers on Proclinicals’s list are enterprises headquartered in Europe: Switzerland is home to the top two drug makers on the list, Roche (SW:ROG,OTCQX:RHHBY) and Novartis (NYSE:NVS,OTC Pink:NVSEF); the eighth spot is held by France’s Sanofi (NYSE:SNY,OTC Pink:SNYNF).
Evaluate Pharma forecasts that Abbvie is on the path to “overtake Roche to become the biggest pharma company by sales in 2026.”
Europe represents the second largest pharmaceutical market in the world, and it was valued at US$219.9 billion in 2019. The European pharmaceutical market is expected to grow at a compound annual growth rate of 4.5 percent between 2019 and 2027.
Among the geographic markets, Europe is the number one exporter of pharmaceutical drugs, with shipments in 2020 totaling US$328.4 billion, or 80.5 percent of the global total. The countries experiencing the most growth in terms of pharma exports are Slovenia (up 42.2 percent), Ireland (up 28.8 percent), India (up 13.5 percent) and Italy (up 11.2 percent).
Europe is known for innovation as well, and there are many products in the R&D stages right now. One of the latest breakthrough innovations to come out of the region is Gavreto (pralsetinib) for the treatment of adults with RET fusion-positive advanced non-small-cell lung cancer, developed by Roche.
Pharmaceutical industry overview: Global outlook
While the US and Europe are the frontrunners in the global pharmaceutical market, total prescription drug sales worldwide are projected to reach nearly US$1 trillion by 2026, according to Evaluate Pharma, with biologics as one of the highest-performing segments.
Oncology often leads the pack in the pharma sector. Research and Markets projects that the oncology drug market will grow at a compound annual growth rate of 7.4 percent to hit US$222.38 billion in 2027.
This is an updated version of an article first published by the Investing News Network in 2015.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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