| According
to IMS HEALTH's recently published Pharma
Prognosis International 2001-2005 (PPI), which
forecasts pharmaceutical sales in the ten major markets
of the world (USA, Japan, Germany, France, UK, Italy,
Spain, Canada, Australia and Belgium), an innovation-driven
USA will be the engine for growth in the global pharmaceutical
market between 2001 and 2005. As a result, the USA
will increase its dominance of the global market,
with its 53% share of the PPI region forecast to grow
to over 60% in 2005.
*Qtr
III 2000 Exchange Rate
Source: Pharma Prognosis International, 2001-2005
This
widening of the gap between the USA and the rest of
the world will continue a trend that has prevailed
throughout the 1990s. IMS HEALTH data show that the
US pharmaceutical market was roughly the same size
as the European market at the start of the 1990s,
but has since grown to twice the size of the European
market.
According to PPI, this trend looks set to continue,
unless there are moves towards price deregulation
in Europe and Japan. The data show that growth in
the USA tends to be driven by value (price) rather
than volume, due in part to the launch of innovative,
premium-priced products. Europe and Japan have been
unable to innovate to the same extent as the USA,
and as a result have fallen behind.
According to PPI, "The bottom line is that the highly
regulated and fragmented healthcare systems of Europe
and Japan have failed to stimulate growth to the same
extent as the deregulated US environment... greater
price freedom for new products in Europe and Japan
would be a significant boost for these markets and
could provide some stimulus for R&D investment."
PPI forecasts that the US market will grow by almost
12% per annum between 2000 and 2005, a rate similar
to the annual growth recorded between 1995 and 2000.
This growth is matched by no other developed market.
Of the major European markets, only Spain will approach
double-digit growth during this period, while Japan
is forecast to record just 2% annual growth.
Source:
Pharma Prognosis International, 2001-2005
The strong growth of the US market also helps to explain
the success of the US pharmaceutical corporations
since, despite the global nature of the pharmaceutical
industry, most multinationals still generate the majority
of their sales in their home markets.
The following figure illustrates the gap between US
companies and their European rivals in terms of sales
growth in 2000. Of the top ten pharmaceutical corporations
in the PPI region, almost all of the American companies
(in blue) recorded higher growth in 2000 than the
European companies (in red). There are no Japanese
companies in the top ten, despite that market's status
as the second largest in the world.
Note:
bubble size is equivalent to market value
Source: Pharma Prognosis International, 2001-2005
The continued dominance of the US market will be driven
by the USA's huge lead in biotechnology, both in terms
of the number of companies in the sector and their
R&D spending. The latest data, quoted by PPI, show
that 63% of biopharmaceutical development work is
done in the USA, compared with 25% in Europe and 7%
in Japan. In 1999, the combined R&D expenditure of
the top seven European biotech companies was just
€ 162 million, compared with € 1.67 billion by their
US counterparts.
PPI also states that, between 1991 and 2000, the US
pharmaceutical sector accounted for over three quarters
of all licensing agreements involving new R&D tools
and general purpose technologies, compared with 12%
for the UK, 4% for Germany and 4% for all other EU
countries.
The data also indicate that the post-launch market
penetration of innovative products is an area in which
companies in Europe and Japan lag behind those in
the USA. Data quoted by PPI show that, from 1985 to
1998, 22% of NCEs originating from 44 US companies
achieved international status, while just 13% of NCEs
from 119 European companies, and 6% of NCEs from Japan,
achieved an equivalent status.
According to PPI, "In today's market more than a fifth
of new drug launches are defined as biopharmaceuticals...
if their biotech industries do not catch up quickly,
both Europe and Japan will lag the USA in terms of
NCE launches as well as market penetration."
Find a comprehensive and independent guide to the
PPI markets at: Pharma
Prognosis |
