Pharmaceutical Major Markets

Economic prosperity rather than population numbers or geography dictates demand for pharmaceuticals and the existence of pharmaceutical major markets. For example, developed nations such as North America account for 44 per cent of global sales and Europe accounts for 24 per cent.

In effect, per capita incomes count and so does medical literacy. Even more important is a healthcare system that provides universal access to medical care.  Now, most of the pharmaceutical major markets originate in the developed world, but the situation will change in the coming years as developing countries such as China and India ascend the economic growth curve.

United States of America

Important therapeutic segments in the USA are the central nervous system, gastro-intestinal diseases, infectious diseases, cardiovascular diseases, endocrine diseases and oncology.

Key issues that govern fortunes in this market include rising cost of bringing new products to market, government-imposed price controls, increased emphasis on health measures and the impact of government intervention on industry.

The USA is the largest of the pharmaceutical major markets, accounting for roughly 44 per cent of global pharmaceutical sales in 2003. The USA market is dominated by companies like Pfizer, GSK, Merck, AstraZeneca, BMS, Wyeth, Johnson & Johnson, Aventis and Novartis.

During 2002, Pfizer recorded the highest pharmaceutical-generated revenues within the USA market with sales of US$18.1 billion, giving the company a 10.7 per cent share of the market. GlaxoSmithKline (GSK) was a close second place with USA pharmaceutical sales of US$17.2 billion, this equates to a 10.2 per cent market share.

The top nine pharmaceutical companies by USA sales accounted for 56 per cent of the market in 2003, indicating that although the market may be highly fragmented, revenues are not.

Japan

The various market segments being catered for by the manufacturers in Japan are cardiovascular, infectious disease, endocrine, gastro-intestinal, oncology and the central nervous system.

The major growth drivers are changing disease profiles. For examples, the factors that are driving chronic diseases are the changing demographic trends and ageing population, changes in consumption patterns, rapid urbanization and social disintegration, globalization and the like.

Moreover, there are some technological factors which are also responsible for the overall growth of the industry. Heavy investment in R&D, with an estimated spending of US$52 billion in 2003 from the top 20 companies is one of the important factors.  New avenues such as biotechnology, genomic research and pharmacogenetics could open up new areas of drug development.

The Japanese market accounted for 13.9 per cent of the world market's value in 2002, making it the second largest single-country pharmaceutical market in the world. It is the only market across the globe that is not currently dominated by the giant western pharma companies. The top three companies that are enjoying a considerable market share in Japan pharmaceutical industry are Takeda Chemical Industries, Sankyo and Shionogi. All the key companies and their respective shares in the Japanese pharmaceutical industry are shown in Figure 22.

As the diagram shows, Takeda Chemical Industries was the largest pharmaceutical company accounting for 6.6 per cent of the market. Sankyo was the second largest Japanese pharmaceuticals company, accounting for 5.3 per cent of the market with local (applicable) revenues of US$2.9 billion. The top eight pharmaceutical companies in Japan accounted for 72.1 per cent of the total market.

United Kingdom

The various market segments being catered for by the manufacturers in the UK are the central nervous system, infectious diseases and oncology.

The UK pharmaceutical market accounted for 12 per cent of the European market in value terms in 2002 making it the third largest pharmaceutical market in the region.
The major players in this region are GlaxoSmithKline, AstraZeneca, Pfizer, Merck & Co, Wyeth and Novartis. Figure 26, previous page shows all the key players and their respective market share in the UK pharmaceutical industry.

The largest company operating in the UK pharmaceutical market (in revenue terms) during 2002 was GSK. It enjoyed a market share of 12.3 per cent for the year 2002. The top seven companies operating in the UK accounted for 44.6 per cent of the local market's value in 2002.

Europe

The various market segments being catered for by the manufacturers in Europe are cardiovascular, central nervous system, alimentary, respiratory, anti-infectives, genito-urinary and musculo-skeletal.

The major demand drivers in the European pharmaceutical industry are: extensive role of public research in the area of new production knowledge and critical expertise, de-regulation of long regulatory and heterogeneous process into a simple and unified mode across all Europe, encouragement of financing innovations for small and medium-sized enterprises, which form a major portion of the European pharma industry and finally, government initiatives and special tax credits.

In 2002, the European pharmaceutical market accounted for 31.2 per cent of the global market making it the second largest market in the world (although Japan is the second-largest country market). The major companies operating in this region are GSK, AstraZeneca, Pfizer, Novartis, Roche, Merck & Co., BMS, Johnson & Johnson and Bayer. Figure 30 shows all the key companies and their respective share in the European pharmaceutical industry.

In 2002, the leading pharmaceutical company in Europe was GlaxoSmithKline (GSK), which reported applicable revenue generation of US$5.7 billion within Europe (22 per cent of the company's total applicable revenues).

AstraZeneca was the second largest company within the European market in 2002, recording applicable revenues of slightly less than US$5.7 billion (32 per cent of the company's total revenue generation).

The top nine pharmaceutical companies in Europe accounted for 30.1 per cent of the European market's value.

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