World pharmaceutical market to surpass $900 billion by 2008
30 May 2004
Source: Medical News Today
Though the pharmaceutical industry remains one of the most profitable and stable industries, several macro-level variables are influencing fundamental changes in the industry structure.
The chief variables are: the increasing role of substitutes-generic pharmaceuticals threat; the threat of new entrants-emergence of bio-pharmaceuticals and genome revolution; increasing buyer power-power of third party payers, government buyers, and health maintenance organizations, and increased health awareness amongst patients and changing suppliers-enhanced outsourcing in manufacturing and R&D.
Additionally, changing world demographics (increasing graying of world population), stringent regulatory environment, declining R&D productivity, worldwide compliance of General Agreements on Tariffs and Trade (GATT) and Trade Related Intellectual Property Rights (TRIPS) and emergence of e-pharmaceuticals is likely to reshape the industry.
According to a soon-to-be-released report from Business Communications Company, Inc. (www.bccresearch.com) RB-191 World Pharmaceutical Markets, the world pharmaceutical industry, stood at $541.0 billion in 2002, with 8% year-on-year growth.
This industry accounts for 24% of the healthcare sector and been growing handsomely at the double-digit-rate mainly driven by the demographic shifts (i.e. increasing elderly population), changing epidemiological patterns, increase in healthcare awareness amongst the masses and finally, by the ability of the industry to provide innovative cures for various ailments. The world's per-capita spending on pharmaceuticals has increased steadily from $72 in 2000 to $87.1 in 2002.
The industry is comprised of 4 major sectors: ethical, generic, OTC and biopharmaceutical. Ethical pharmaceuticals account for 74% of the total world pharmaceutical market. The sector is growing at double-digit rates but is under increasing pressure owing to the strong competition from generic and biopharmaceutical sectors.
The ethical sector is increasing by relying on blockbusters and innovative medicines to drive its growth. Life-style diseases will continue to drive the growth of this sector. The change in the life-styles would fuel demand for cardio-vascular agents, CNS (central nervous system) and alimentary/metabolism products.
The generic pharmaceutical sector currently valued at $30.5 billion, holds 6% of the total world pharmaceutical market. This sector is expected to increase its penetration in the world pharmaceutical market to 7% by 2008. The sector's growth will continue to be fueled by patent expirations worth $80 billion through 2010.
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