With global demographic changes, a changing healthcare focus, and the cost pressures driven by the healthcare reform, the challenges facing the pharmaceutical industry are daunting. These social and economic shifts are creating some unprecedented trends, possibly reshaping the industry for the foreseeable future. Some of the major trends include: Generics - While generics face punishing competition in the US and Europe, there are opportunities in emerging country markets due to higher insurance coverage and a rising middle class. Reduced Share of Major Companies - Since 200 the share of large pharmaceutical companies has dropped from a high of 46% in 2007 to a 15 year low of 35% in 2014. This trend is expected to continue, although at a slower pace.
China - The Asia Pacific’s pharmaceuticals consumption reached $612.2 billion 2014, posted a CAGR of 11% over 2008-2014. Global pharmaceuticals production value grew by 4% during the same period, reaching US$1.2 trillion in 2014. The industry’s growth was primarily driven by booming production in China, which accounted for 28% of global turnover in 2014, up by 9% in 2014. The growth was mainly fueled by rising annual disposable incomes, expanding middle-class populations and growing incidence of chronic diseases. Hospital Growth - Hospitals, medical and dental services, the largest buyer of pharmaceuticals, spent $408 billion in 2014. The hospitals, medical and dental services industry grew by 32% over 2008-2014 which is positively reflected in the rising global demand for pharmaceutical products. Reduced Share of Major Companies - Since 200 the share of large pharmaceutical companies has dropped from a high of 46% in 2007 to a 15 year low of 35% in 2014. This trend is expected to continue, although at a slower pace. Areas of Focus - Prevention is now center stage as a way to possibly reduce longer term spending on healthcare. The aging population will also play into prevention, as there is greater focus on this rapidly expanding segment of the population. This prevention will in-turn lead to a greater emphasis on vaccines.
The global pharmaceutical market is projected to reach $1.12 trillion in 2022, representing a CAGR of 6.3% from 2016. Fast growing segments of the pharmaceutical market include biologics, generics and over-the-counter (OTC) drugs. The North American market is expected to reach approximately $460 billion in 2022.
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