Pharmaceutical Industry Report

Our main pharmaceutical industry report gives detailed information on the current state of the pharmaceutical industry and pharmaceutical market. In this document we will give you some insight into the main bullet points and type of information available to you.

The global pharma industry is a massive steadily growing industry. Even though the growth slowed down from its average of 9% to 5.95% in 2005 the market was still valued at USD 582.71 billion. The growth is expected to rise by 7-8% during 2006.

The 3 main markets of US, Europe and Japan account for over 84% of the current market with a value of USD 491.22 billion

Our pharmaceutical industry report also describes the various therapeutic segments in which the industry works, showing the new trend away from working on infectious diseases to treating lifestyle disorders. This has become necessary as an increasing ageing population in the developed countries show more interest in healthcare etc. Four of the top five therapeutic segments now deal specifically with these lifestyle disorders.

We show how the pharmaceutical companies are now working with biotec companies, sharing pharmaceutical research and information on the development of biological and chemical drugs. The pharma companies are also producing equipment for use by medical professionals and diagnostic laboratories worldwide.

Many of the companies not only concentrate on human health care but put a lot of resources into animal health care.

Major Players in the Pharmaceutical Industry

In 2005 only four of the top ten pharma companies had a positive growth rate. This was due to various factors, including increased R&D costs and patent expiries. The top five major players and their current revenues are displayed below. Of these majors only Johnson & Johnson and Novartis made a positive growth.

• Pfizer - USD 51.29 billion
• Johnson & Johnson - USD 50.51 billion
• Glaxo Smith-Kline - USD 37.27 billion
• Sanofi-Aventis - USD 32.34 billion
• Novartis - USD 32.31 billion

Each of these companies operate businesses and market products in over 100 different countries. Many of the products that are now coming on to the market have been developed in more than one country, as the manufacturers outsource R&D and production to save in time and costs.

All of the main companies recognise the service that new technology is supplying to them. New developments allow them to analyse over 100,000 compounds per day, greatly speeding up some of the stages of R&D.

Mergers and Acquisitions in the Pharmaceutical Industry

2005 saw 247 mergers and acquisitions in the pharmaceutical industry. Due to many governments looking for low cost pharmaceuticals and patent expiries on many branded drugs, the major companies are constantly trying to find ways to keep costs down. In many cases the economies of scale and the diversification offered by M&A give immediate returns. Novartis, mentioned above, featured in three of the top ten M&As for 2005, acquiring a 56% share in Chiron Corp (US), Hexal AG (Germany) and Eon Labs (US)

In 2006 consolidation is expected to continue with global pharmaceutical companies acquiring biotech firms to gain access to products in the later stages of development. In February 2006, 16 M&A deals worth USD 965 million took place.

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