Since the mid 1990’s, many pharmaceutical companies have been going through mergers and acquisitions of mid to large size companies. Most have been biotech companies who focus on the development of products based on living cells. Another large part of the merger trend has been companies that are trying to create technology that deals with the genetic makeup of humans.
The US market has become more and more popular among foreign companies because of the uncontrolled pricing structure, insurance reimbursement policies, government support for research, and very quick approval processes. Foreign companies benefit from relocating to the US because they have the opportunity to advertise their product to the medical community as well as consumers which greatly increases awareness and consumption of the product.
When the Food and Drug Administration was restructured, it had a large impact on the pharmaceutical industry. There was a large lobbying effort by the drug industry to decrease the time it takes to approve a new drug. The average went from 2-3 years to less than one year which is a dramatic decrease.
The pharmaceutical industry is seeing seven new changes that are allowing the reshaping of the marketplace and are making way for major opportunities to arise:
- Instances of chronic disease are increasing, placing even greater pressure on already stretched healthcare budgets
- Healthcare policy-makers and payers are increasingly mandating what doctors can prescribe
- A growing number of healthcare payers are measuring the pharmacoeconomic performance of different medicines. A widespread use of electronic medical records will give them the data they need to insist on outcomes-based pricing
- Boundaries between different forms of healthcare are blurring, as clinical advances render previously fatal diseases chronic and the self-medication sector expands
- Demand for medicines is growing more rapidly in the emerging economies than the industrialized economies
- Governments are beginning to focus on prevention rather than treatment, although they have not yet invested very much in pre-emptive measures; and
- Regulators are becoming more cautious about approving truly innovative medicines.
As the population of the world continues to rise, there is a higher demand for pharmaceutical drugs. As you can see the sales are significantly higher in 2020 than in 2011. The U.S., Japan, and China are among the among the many key countries in which the pharmaceutical industry is observing growing profits. Furthermore the U.S continues to dominate the industry followed second to the European countries. Many Asian countries are focusing on outsourcing where India is a major outsourcing hub for research and devlopment. China is growing at double digit rate and will be third largest market.
Many companies are focusing on improving research and development efforts and productivity, and reducing costs of operating. Furthermore, many pharmaceutical companies are working on outsourcing and outsourcing business mode.
As of 2012, the top 10 leading countries in the industry were USA, Japan, China, Germany, France, Brazil, Italy, Canada, the UK, and Spain.
In emerging markets, governments want to expand access to treatment. But, drugs already account for a large share of health-care spending—44% and 43% in India and China respectively, compared with 12% in Britain and America. Out of all these countries, the United States is the home of most of the world’s big pharma, whose consumers pay the world’s highest prices for drugs and thus keep down prices for others. Recently, the US wants to use the TPP (Trans-Pacific Partnership) to restrict such compulsory licences to infectious epidemics, while emerging-market countries want to make it harder for drug firms to win patents.
People older than 60 years consume the most pharmaceutical drugs. In addition, there is a rising market for the Latino population. Overall there is a boosting demand for drugs relating to cancer, diabetes, and other chronic ailments. According to the U.S National Library of Medicine, “the number of adults at high risk of diabetes was 38.4 million in 1991 and 49.9 million in 2001. The total diabetes burden is anticipated to be 11.5% (25.4 million) in 2011, 13.5% (32.6 million) in 2021, and 14.5% (37.7 million) in 2031. Among individuals aged 30 to 39 years old who are not currently targeted for screening according to age, the prevalence of diabetes is expected to rise from 3.7% in 2001 to 5.2% in 2031. By 2031, 20.2% of adult Hispanic individuals are expected to have diabetes.
Join us next week as we discuss this industry’s interactions in different countries and continents!