Decision Resources, a research and advisory firm for pharmaceutical and healthcare issues, found that in 2011, the global pharmaceutical market, in dollar terms, benefitted significantly from positive currency effects.
According to new data from Decision Resources' Pharmaview suite, global pharmaceutical sales grew year-over-year by a respectable 5.3% to reach $707 billion, compared with 3.6% year-over-year growth in 2010. The relative weakness of the dollar in 2011 compared to 2010 played a large part in this growth, and many of the major drug companies, such as Pfizer, Abbott, Eli Lilly and Johnson & Johnson all reported positive currency effects in the 2-4% range in 2011.
But, Pharmaview analysis finds that with the industry entering a period of significant patent expiries, and with ongoing economic headwinds and cost-containment efforts by payers worldwide, future growth looks anemic at best. Over the next seven years, the global market is expected to record a compound annual growth rate of just 2.1%, reaching $817 billion in 2018. At the company level, Pfizer retained its spot as the top pharmaceutical company by sales by a considerable margin, with $58 billion in ethical drug sales in 2011. However, with Lipitor now experiencing generic competition, Decision Resources expects Novartis to be the leading company by 2015, and for it to maintain this position throughout the remainder of the forecast period to 2018.
"Unsurprisingly, the major pharmaceutical companies face a host of challenges going forward. Of the current top 10, only GlaxoSmithKline and Johnson & Johnson are expected to show organic growth between 2011 and 2018,” said Pharmaview director Alasdair Milton. “Many of the others, such as AstraZeneca, Merck & Co. and Eli Lilly, are expected to experience a precipitous decline in sales as patent protection around many of their key brands expires.”
Milton added, “The industry remains fragmented, and we believe that there is still room for further consolidation, as the top-line of many companies continues to decline, and shareholders put pressure on management to increase value."
The sales findings are from the most recent release of Decision Resources' Pharmaview, which assesses the commercial aspect of the global pharmaceutical market and provides continually updated analysis of more than 2,900 drugs from more than 280 companies, covering 167 product classes and 14 therapy areas. Pharmaview also provides deep analysis into the world's leading biopharmaceutical companies.