Pharmaceutical Industry – an Overview
The pharmaceutical industry is an industry related to the research, development, mass production, market research and distribution of medicines, mainly intended for the prevention, relief and treatment of diseases. Pharmaceutical companies can work with generics or original (branded) drugs. They are subject to a variety of laws and regulations regarding drug patenting, clinical and preclinical trials, and marketing features of ready-to-sell products. Currently, the pharmaceutical industry is one of the most successful industries.
Leaders and outsiders of world pharmaceuticals
According to the statistics from the World Bank and the United Nations Commodity Trade Statistics Database, Germany leads the export of pharmaceutical products with an export volume of almost 67 billion US dollars. The share of German pharmaceutical exports is about 30% of the supply abroad of all the country’s chemical products, but due to the diversified structure of foreign trade in total merchandise exports, this share is small – only 4%. Pharmaceutical production in Germany is developing according to the typical model of developed countries – great importance is given to new research and development. For example, in 2011 alone, about 10.5 billion euros were invested in pharmaceutical R&D in this country.
Switzerland ranks second in the rating of countries for pharmaceutical exports. Last year, the export of pharmaceutical products in this country reached $54 billion. Pharmaceuticals are the undisputed leader in the Swiss industry. Switzerland’s positions are especially strong in the production of antipyretic drugs, vitamins, anti-cancer interferon, and AIDS medicines. A characteristic feature of the Swiss chemical industry is the high level of R&D expenses. In terms of such an indicator as the percentage of R&D expenditures on revenues, Swiss Hoffmann-La-Roche with 32% is the second pharmaceutical company in the world after the American Pfizer (35%), and Swiss companies are undoubtedly leaders in terms of research costs. Every fourth Swiss franc is spent on research and development in the pharmaceutical industry.
Belgium ranks third in the rating with pharmaceutical exports of $44 billion. Such high positions are due to the fact that such large companies as Pfizer and GSK have completely transferred the production of vaccines to Belgium. They make up most of the country’s pharmaceutical products. In addition, the re-export of pharmaceutical products, which includes both the processing of initial products and sorting and repacking, can be considered Belgium’s specialization. This also confirms the large volume of imports of pharmaceutical products.
Despite the large-scale transfer of production by the American pharmaceutical giants to other countries, the USA, which takes 4th place in the rating, continues to play a very important role in the global arena of pharmaceutical trade. Often, this country is the “trendsetter” in the field of production and trade in pharmaceutical products, one can note the introduction of three stages of clinical trials, or state stimulation of the production of medicines for rare diseases. Among the 50 largest pharmaceutical companies in the world are American.
The five place is taken by France has pharmaceutical exports of $34 billion. THe country develops and supplies a large number of medicines, cosmetics and other similar products to the world market.
In general, it is not surprising that the top twenty of the rating includes mainly developed European countries. This is due to the fact that pharmaceutical production is associated with high costs for research and development of new drugs. In addition, the process of manufacturing pharmaceutical products often requires high costs for equipment, skilled personnel, etc.
Leading global companies
As of 2013, the leading pharmaceutical companies in the world were (sales, billion dollars):
- Pfizer (USA) – 59.0
- Novartis (Switzerland) – 56.7
- Roche Holding (Switzerland) – 49.7
- Merck & Co (USA) – 47.3
- Sanofi (France) – 46.1
- GlaxoSmithKline (Great Britain) – 43.0
- Abbott Laboratories (USA) – 39.9
- AstraZeneca (Great Britain) – 28.6
- Eli Lilly and Company (USA) – 22.6
- Sinopharm Group (China) – 21.5
- Teva Pharmaceutical Industries (Israel) – 20.9
- Takeda Pharmaceutical (Japan) – 18.2
- AbbVie (USA) – 18.0
- Bristol-Myers Squibb (USA) – 17.6
- Otsuka Pharmaceutical (Japan) – 13.9
- Novo Nordisk (Denmark) – 13.8
- Merck KGaA (Germany) – 13.8
- Astellas Pharma (Japan) – 11.7
- Daiichi Sankyo (Japan) – 11.3