Pharmaceutical Industry Overview: Top International Regions for Drug Companies

The pharmaceutical industry is concentrated in the US and Europe, and the the 10 biggest drug companies are located in those regions.

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The world’s pharmaceutical industry is dominated by the American and European markets. According to Forbes’ list of top companies for 2017, the 10 biggest drug companies are all located in these two regions.

Although other regions like China and India have seen growth in recent years when it comes to the life science markets due to potent capital opportunities and an expanding demand for products and devices, the US and Europe remain on the top of the line for pharmaceutical consumption and development.

Healthy and transparent systems allow for public companies to bring their products to the market after proper vetting. Patents allow the protection of novel candidates and treatments against serious diseases. With that in mind, here the Investing News Network (INN) breaks down the two top pharmaceutical regions in more detail.

Top pharmaceutical regions: United States

The US dominates the pharmaceutical market, both in consumption and development. In 2016 medicine spending in the US reached was projected to reach $450 billion total.

In 2016 through the Center for Drug Evaluation and Research (CDER) the US Food and Drug Administration approved a total of 22 new drugs into the market. Among them included treatments for certain types of ovarian cancer, Duchenne muscular dystrophy, all six major hepatitis C virus.

The US is the world’s leader in research and development. In 2013, the industry saw over over 6,000 sponsored clinical trials in the US, involving 1.1 million volunteer participants in this endeavor.

According to PhRMA’s 2016 Profile, the American pharmaceutical sector spends 18.3 percent of sales on research and development (R&D)—the highest ratio across the manufacturing industry. PhRMA members spent an estimated US$58.8 billion on R&D last year.

A strong intellectual property system, which rewards innovation and 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 stated.

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 it one of the most important sectors of the American economy.

Top pharmaceutical regions: Europe

The rest of the top 10 pharmaceutical companies on Forbes for the top pharmaceutical regions include enterprises from Switzerland, France, and the UK, including some names like Novartis (NYSE:NVS) and Sanofi (NYSE:SNY).

Production of pharmaceutical products reached €225,000 million in 2015 according to the European Federation of Pharmaceutical Industries and Association. This, in turn, boosted the continent to account for 23 percent of the total pharmaceutical sales in the world–just behind the US which represents 58 percent of sales of new medicines launched during 2010 and 2015.

 This is an updated version of an article first published in 2015 on the Investing News Network.

Don’t forget to follow us @INN_LifeScience for real-time news updates.

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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