Global Pharma Market is the total value of Pharmaceutical Formulations in the world sold at the retail level to the final consumers.
Why we should know?
To know the pharmaceutical market potential country wise, therapeutic category wise, product wise etc., so that we can make appropriate choices and decisions to achieve company objectives.
Sources of data:
Various data such as Health care, Disease pattern, regulatory data, etc., can be obtained from
Respective Ministries of Health portals given below (Click on hyperlink):
On line reports on each country’s health and pharmaceuticals can also be obtained from the following websites:
Pharma research portals:
Detailed research into various aspects of Pharma markets can also be obtained from the following research portals. Most of these need subscription or charge for each of the reports.
Journal /Magazine publications etc.:
Some of the secondary data can also be obtained from the following journals and magazines.
European Confederation of Pharmaceutical Entrepreneurs (EUCOPE)
European Federation of Pharmaceutical Industries and Associations (EFPIA)
European Pharmaceutical Market Research Association (EphMRA)
International Federation of Pharmaceutical Manufacturers and Associations (IFPMA)
Japan Pharmaceutical Manufacturers Association (JPMA)
New York Health Products Council (NYHPC)
Pharmaceutical Research and Manufacturers of America (PhRMA)
Irish Pharmaceutical Healthcare Association (IPHA)
Types of data:
Data such as basic statistics, overview, disease outbreaks & crises, mortality and burden of disease, health services, risk factors, health systems etc., could be obtained from each country profiles (Please click on each country’s link)
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Country wise healthcare data can also be obtained from the following:
Country wise Economic indicators could be obtained from the following links:
Country wise Pharmaceutical sales data could also be obtained from:
What to analyze and why?
Economic indicators: The following economic indicators are important to evaluate and formulate entry strategies for each country.
GDP (purchasing power parity): A nation’s GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries.
GDP (official exchange rate): A nation’s GDP at official exchange rates (OER) is the home- currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year. The measure is simple to compute and gives a precise measure of the value of output.
GDP – real growth rate: This entry gives GDP growth on an annual basis adjusted for inflation and expressed as a percent.
GDP – per capita (PPP): This entry shows GDP on a purchasing power parity basis divided by population as of 1 July for the same year.
Population: The total population presents one overall measure of the potential impact of the country on the world and within its region.
Budget: This entry includes revenues, expenditures, and capital expenditures.
Inflation rate (consumer prices): This entry furnishes the annual percent change in consumer prices compared with the previous year’s consumer prices.
Exports: This entry provides the total US dollar amount of merchandise exports on an f.o.b. (free on board) basis. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Imports: This entry provides the total US dollar amount of merchandise imports on a c.i.f. (cost, insurance, and freight) or f.o.b. (free on board) basis. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Reserves of foreign exchange and gold: This entry gives the dollar value for the stock of all financial assets that are available to the central monetary authority for use in meeting a country’s balance of payments needs as of the end-date of the period specified. This category includes not only foreign currency and gold, but also a country’s holdings of Special Drawing Rights in the International Monetary Fund, and its reserve position in the Fund.
Debt – external: This entry gives the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Exchange rates: This entry provides the official value of a country’s monetary unit at a given date or over a given period of time, as expressed in units of local currency per US dollar and as determined by international market forces or official fiat. The International Organization for Standardization (ISO) 4217 alphabetic currency code for the national medium of exchange is presented in parenthesis.
Global Pharma Market
Global Pharma Market maintains growth expectations of 4-6% in 2010. Forecast: 5-8% annually through 2014. To reach $1.1 trillion by 2014 growing nearly $300 billion in the next 5 years. The growth in 2008 was 4.8 percent but where as in 2009, the market growth was 7% reaching $837 billion.
Leading products loose patent protection in developed markets and strong growth in emerging markets tilt growth towards generics
Pressure from the payers to curb drug spending on the publicly funded healthcare plans in developed markets will only intensify growth, which will be more than offset by the ongoing, rapid expansion of demand in the Pharmerging markets. The net result over the next five years will be a strong growth — in spite of industry facing the peak years of patent expires and entry of lower-cost generic alternatives.
Pharmerging countries continue to tilt the geographic balance of Global pharmaceutical market. While developed markets will grow only 3-6%, Pharmerging markets will record a growth of 14 – 17% through 2014 which will be around $120-$140 billion from $69 billion over the past 5 years, similar to the growth of developed markets. The U.S. shall continue to remain the single largest market, reaching $360 – $390 billion in 2014, up from $300 billion in 2009, with 3 – 6 percent growth expected annually in the next five years.
Therapy area growth dynamics driven by innovation cycle and areas of unmet need. Higher growth will occur in the therapy areas where there is significant unmet clinical need, high cost burden of disease and new treatment options through innovative science. As the new drugs are brought to market, patient access is expanded and funding is redirected from other areas where lower-cost generics will be available, annual growth is expected to exceed 10 percent through 2014 in the areas of oncology, diabetes, multiple sclerosis and HIV.
Drug budgets growth reduced due to cuts in spending applied by public payers. Due to global economic down turn, publicly funded health systems are under increased pressure to reduce growth in drug budgets. Countries such as Turkey, Spain, Germany and France already have announced restrictions on access or reductions in reimbursements to reduce drug spending growth. Other countries under pressure to restore fiscal balance may take similar actions, or shift more costs to patients.
Generic dominance shall increase as patents expire. In the next five years, as the patents of products with sales of more than $142 billion expire and face generic competition in major developed markets, the patients shift to lower-cost generics in major therapy areas such as cholesterol regulators, antipsychotics and anti-ulcerants reducing the total drug spending by about $80 – $100 billion worldwide through 2014. This will impact the U.S., where nearly two-thirds of the total value of patent expires will occur. Patents of 6 products out of 10 will face generic competition in the U.S. and will peak in 2011 and 2012.
Payers spend less initially while new products await scrutiny. 30 -35 new molecular entities will be launched annually over the next five years. But before being accepted into clinical practice and reimbursed, these will be subject to more rigorous and complex assessments by payers. In many countries such as China, Spain, Italy and Canada, funding and implementation of healthcare at regional or local levels is becoming more significant which will extend the time it takes for new medicines to become available to patients, and therefore contribute to lower initial spending by payers.
The US market – growth improves to 6%
The US pharmaceutical market, which constitutes around 45% of the global market, Grew by 6% — from US$206.4bn to US$218.8bn (Rs9, 310bn-Rs9, 870bn). The growth Rate for Nov’09 was 5%, indicating a steady improvement of the US Pharma market. Moreover, the US Pharma market is growing at 6% in line with the global markets indicating steady and sustainable growth.
The Canadian pharmaceutical market, much smaller in size as compared to the US market, grew by 7% — from US$16.3bn to US$17.4bn (Rs735bn to Rs785bn).
European markets – signs of sluggishness
The five major European pharmaceutical markets (Germany, France, Italy, UK and
Spain) grew by 2% — from US$108.1bn to US$110.3bn (Rs4,880bn to Rs4,980bn).
The growth rate of 3% in November’09 fell to 2% indicating that the European market
is showing signs of sluggishness.
Details of key country drug purchases in these markets are shown in the table
Particulars 12 months ending
12 months ending
Jan’09 % Growth
Economic downturn affects markets
Growth has slowed in countries where with high out-of-pocket spending on drugs and steep decline in macroeconomic activity especially in Russia, Mexico and S. Korea. Growth has been less affected in countries where drugs are largely funded publicly, such as Germany, Japan and Spain.
Chinese market – likely to grow over 20%
China’s pharma market is expected to grow at over 20% per annum and contribute 21% of overall global growth through 2013.
According to IMS data (for 12 months ending January 2010):
The top five global pharmaceutical companies were Pfizer, Merck, Astra Zeneca, Novartis and Glaxo Smith Kline (GSK).
The five largest-selling drugs were Lipitor (Pfizer), Plavix (Bristol Meyer Squibb, Sanofi Aventis), Nexium (Astra Zeneca), Seretide/Advair (Glaxo Smith Kline) and Crestor (Astra Zeneca).
The top five therapeutic classes were: cholesterol and triglyceride regulators, anti-ulcerants, anti-depressants, anti-psychotics and Angioten-II antagonists.
Clinical trials carried out by MNC pharma companies in India has seen a 30% drop from 229 trials in 2008 to 158 trials in 2009. This is due to sharp reduction in R & D budgets in 2009 due to global recession and shrinking R & D pipeline of MNC pharma companies.
- Astra Zeneca has signed an agreement with Torrent Pharma to market 18 of its products in 9 emerging markets.
- Glenmark Pharma has been issued a warning letter by US FDA for marketing unapproved Nitroglycerin tablets in the US.
- Novo Nordisk has launched its new diabetes drug Victoza in the US.
- The US FDA has approved Astra Zeneca’s statin Crestor for additional indications.
- Roche and Biogen’s Rituxan were cleared by US FDA for the treatment of chronic leukemia.
- The US FDA approved Pfizer’s Prevenar 13 pneumococcal vaccine.
- Daiichi Sankyo is forming a new subsidiary in April’10 for the sale of generics in Japan.
- US FDA has warned Eli Lilly about manufacturing problems at its Puerto Rican plant that manufactures Humalog Insulin.
US Healthcare Bill
- Legislation to overhaul US Healthcare system would cost $940bn over next 10 years.
- The Bill will extend coverage to 32m uninsured Americans. This will include aged people or those deprived of insurance based on pre-conditions. The drug requirement for them will be high.
- With this 95% of the US population will be covered by healthcare.
- It will cut the federal budget deficit by $138bn in the first decade.
- Insurers such as Cigna Corporation would get millions of new policyholders and are required to accept all customers.
- Big pharma companies including Pfizer and Amgen will be major beneficiaries.
- The new regulations are likely to generate direct new business of $115bn over the next 10 years ($11bn per annum).
- The branded biologics will have exclusive period of 12 years instead of 7 years earlier, leading to prolonged protection. This is positive for US biotech companies.
Global Pharmaceutical Market Estimated to Double to $1.3 Trillion by 2020
The global pharmaceutical market shall more than double in value and reach $1.3 trillion by 2020, driven by soaring worldwide demand for medicines as the population grows, ages and becomes more obese and as chronic conditions and infectious diseases tied to global warming increase. It is warned that the current pharmaceutical business model is unsustainable and the industry must fundamentally change the way it operates if it is to capitalize on future growth opportunities.
The E7 countries – Brazil, China, India, Indonesia, Mexico, Russia and Turkey – could account for as much as one-fifth of global pharmaceutical sales by 2020, an increase of 60 percent since 2004. Further, as these countries become more prosperous, the chronic conditions in the developing world will increasingly resemble those of the developed world, with a significant rise in hypertension and diabetes. Many scientists also predict that global warming and rise in greenhouse gases will have a major effect on the world’s health, with the spreading of diseases such as malaria, cholera and higher prevalence of respiratory illnesses such as asthma and bronchitis.
The pharma industry will not be able to meet the challenge unless R&D productivity improves. The Pharma Industry lacks innovation. The industry is investing twice as much in R&D as it was a decade ago to produce two-fifths of the new medicines it then produced. It is simply an unsustainable business model. The current pharmaceutical industry business model is both economically unsustainable and operationally incapable of acting quickly enough to produce the types of innovative treatments that will be demanded by global markets. Pharmaceutical companies are facing a dearth of new compounds in the pipeline, poor share value performance, rising sales and marketing expenditures, increased legal and regulatory constraints and tarnished reputations.
In the next decade, the industry must invest in research and focus less on sales and marketing. Pharma’s traditional strategy of placing big bets on a few small molecules, marketing them heavily into primary care with the aspiration of achieving blockbuster sales, will no longer be viable. The Industry must focus on the development of medicines that prevent, treat or cure. These must demonstrate tangible benefits and tackle unmet medical needs. Governments and payers must play their part and ensure the industry is rewarded for these efforts.”
Some of the major changes expected are:
The blockbuster sales model shall be replaced by a smaller, smarter and more effective sales force, led by key account managers who will negotiate contracts based on therapeutic benefit and outcomes. The quality of value shall prevail over the quantity. Integrated packages of medicines and services, and some services, such as personalized patient monitoring and disease management, shall be more valuable than the medicines themselves.
Emphasis on outcomes to increase. Successful companies will prove that their products really work and add value. Companies also will be financially rewarded for developing new therapies versus me-too medicines. Risk-sharing agreements will become more mainstream with drug manufacturers adjusting prices according to the results of outcomes analysis data that demonstrates drug efficacy.
Compliance monitoring becomes win-win for patients, payers and providers. Solutions to monitor and ensure that patients are fully compliant with their medications could generate more revenue a year in new sales, and would improve outcome and patient safety. Pharmaceutical companies will revise their proposition, employ new technologies and develop personalized compliance monitoring techniques as a value-added service to patients, payers and providers.
Prevention shall come first than treatment. Pharma companies health management, with wellness programs, compliance monitoring and a significant increase in the production of vaccinations. Vaccines market is estimated to grow to $42 billion by 2015.
New technologies will drive R&D. Technological transformations such as genetic-based diagnostics, human genome etc., shall reshape the business strategies.
The current linear R&D process will give way to in-life testing and live licensing. Phase I, II III and IV clinical trials will be replaced by collaborative in-life testing and ‘live license’ issued contingent on the ongoing performance.
Greater international regulatory cooperation. There may well be one global regulatory system by 2020. Such a system would help to reduce the spiraling costs of regulatory compliance and reduce time to market.
The supply chain functions will become revenue generating. The future supply chain will be revenue generating rather than a cost center. 2020 will likely give rise to ‘made to order’ therapies.
More sophisticated direct-to-consumer distribution channels shall diminish the role of wholesalers. Growing self medication sector, automated dispensing direct to consumers, automated prescriptions etc., will supplant reliance on wholesalers.
The entire global health care system is being subjected to a seismic shift or upheaval that will force the pharmaceutical companies to change the way they operate. The challenges are steep, but the rewards could be significant.
(Adapted from http://www.PharmaManufacturing.com)