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Introduction: Pharmaceuticals Download PDF

Recently, the pharmaceuticals industry, which is composed of drug makers, distributors, and wholesalers, along with biotechnology firms, has been doing very well relative to other industries. Between 1992 and 2002, revenue has more than tripled among biotech firms alone, reaching nearly $30 billion. An increasingly aging population taking more and more medications promises further growth.

Risk Description

Pharmaceuticals
The world pharmaceuticals market will weaken slightly this year, expanding five per cent to USD 735 billion according to Healthcare Insight. The contribution of the seven industrialised countries that drive sector activity — United States, Japan, United Kingdom, France, Germany, Italy, and Spain — will slip below 50 per cent for the first time. The seven most dynamic emerging markets — the so-called pharmerging countries, Brazil, China, India, Mexico, Russia, South Korea, and Turkey — will contribute about 25 per cent.

This situation is attributable to several factors:

In industrialised countries, the turnover of major laboratories will continue to suffer from the effects of expiration of many patents protecting blockbuster drugs as well ass from the pressure exerted on sales prices by health spending authorities, tougher certification standards for launching new drugs, and the withdrawal of drugs from the market for safety reasons;
In emerging regions, laboratories specialised in generic drugs and biotechnologies have benefited from the price controls imposed on drugs in mature markets, which have spurred switching to generics, the implementation of local private health coverage systems, and broader access to health care by previously-excluded population segments — particularly in India with local laboratories performing very well both domestically and in the world market.