Pharmaceutical Market

Data, outlook and considerations

Caterina Lazzarini

The 2013 great glaciation went away. Pharmaceutical companies survived the patent cliff of the last two years and are ready to face a 2014 where the market will be stable or slightly growing.

According to IMS Health experts, in 2013, the global pharmaceutical market will grow by 3.1 % and stable or positive trend is foreseen for the next future. A perspective shared even by several other market and financial analysts. According to Moody’s, in 2013 the global pharmaceutical industry will start to produce profits again because only a few top-selling drugs will lose the patent protection, the negative effects of the patent cliff will recede and the quality of research products in late-stage pipeline is high. Several innovative products can drive the sales as oral treatments for Hepatitis C, multiple sclerosis treatments easier to administrate, and oncology drugs more effective on certain types of cancer.

In the 2013 Global Data Pharma top 10 lists by global sales Pfizer and Novartis confirm their first and second 2012 places. Roche ranks third with a jump of two positions vs 2012. Even Johnson & Johnson and Abbvie grow, GSK and Lilly are stable, while Merck, Astra Zeneca and Sanofi performed worse than in 2012.

Even in the top10 biological/biotech companies there are few and minor changes. Roche and Amgen occupy the first ranks. Novo Nordisk is at the third place, while AbbVie slides down to fifth position. Good result for Sanofi that came in fourth place from the seventh in 2012. Lilly jumped up, while Merck is stable. Pfizer, Johnson & Johnson and Biogen Idec went down.

The Top 10 list of the best-selling drugs in the world is stable and sees confirmed the first three 2012 positions: Humira (AbbVie) at the first place, followed by Remicade (Johnson & Johnson / Merck & Co) and Enbrel (Pfizer / Amgen). No new entries and only small movements.

New approvals

In 2013, EMA, the European Regulatory Agency, granted 81 new marketing authorizations (+24 compared to 2012); 38 of these were focused on new molecules (3 + vs 2012), which included two new advanced therapies and 11 orphan drugs. The oncology area saw 16 new Marketing authorizations, mostly related to new active ingredients and were targeted therapy. There were five treatments for type 2 diabetes (four of these were new molecules); four new anti-HIV drugs and other three were drugs for the treatment of multidrug resistant tuberculosis (orphan indication). Sixteen the generic approved (+3 vs 2012).

EMA applied the conditional or under exceptional circumstances authorization process to allow quick access to the market for nine drugs used in diseases with unmet medical needs (cancer, vaccine for smallpox) and rare diseases.

On the other side of the Ocean, the FDA, the U.S. regulatory agency, approved 27 new molecular entities (-12 vs 2012, but the number was similar to that of 2011). The number of orphan drugs was important (33%) and 9 molecules have been identified as the first-in-the-class in type 2 diabetes, breast cancer, hepatitis C and metastatic melanoma. The high degree of innovation of the drug submitted allowed the FDA to apply procedures able to ensure a rapid regulatory process and a fast access to the market (Fast Track 37%, Breakthrough 11 %, 27% Priority Review, Accelerated Approval 7%). As a consequence, 20 of 27 drugs submitted to FDA were authorized first in U.S. than in other countries.

New launches

In 2013, they were launched 47 new active substances, 8 more than in 2012, a number similar to that of the 90’s. However, as noted by Alex Shimmings of Scrip Intelligence, the type of molecules is significantly different from those the past: orphan drugs accounted for 28% (13 molecules) of the new product launches and 10 of them were first-in-the class and included innovative therapies. Last year were commercialized 15 anti-infective (this number includes 7 new vaccines and 5 flu-vaccines), 9 new oncological drugs and 10 for alimentary/metabolic diseases, including 5 antidiabetic, 3 molecules for treating dyslipidemia, and 2 for pulmonary hypertension. Despite neurology is the second area of research investments, launches were limited: only 2 last year and three in 2012. No new entries in the cardiovascular market.

Thirty launches (64%) occurred in the U.S., while four occurred in Europe, Japan and India, respectively.

GSK (7 products) was the Pharma company with the best performance with regard to commercialization, followed by Sanofi and Johnson & Johnson that had four products each. Pfizer was the great absent.

2014 outlook: R&D

The 2014 expenditure on R&D will grow by 8.18%. R&D has been moving away from single large-scale sites to diversify interests across geographic regions, technologies and partner companies (e.g. small biotech companies, Contract Research Organization). The long-term goals are and will be taken into consideration during the early stages leading to an increase in licensing in and out processes and outsourcing in order to reduce development costs, gain flexibility and quickly switch from one innovative target to another. This new R&D model started some years ago and is starting to be fruitful, states the CPhI report on R&D based on a survey conducted on a sample of representatives of the pharmaceutical industry.

Cancer (22%), antibiotics (13%), cardiovascular (12%) and central nervous system (12%) are the main areas of interest in which the industry studied new approaches, such as combination therapies and personalized medicines, and drug delivery mechanisms (nanotechnology, 17%, and drug device, 12%). The innovation is acquired through partnerships with research institutes or Universities (75%), merger (20%) licensing out (55%) and in (60%). The products are developed taking into account the quality and methods of control: 40% of respondents use the Quality By Design in the development and analytical technology, 18% 6 Sigma, 15% Stage-gate model and 12% of lean processes.

2014 outlook: market

For the first time, in 2014, the global pharmaceutical spending will exceed 1 trillion U.S. dollars and will reach 1.2 trillion in 2017, according to IMS Health.

Fitch agree on a single digit growth, too. The elements still influencing the market will be:

patent losses that can be managed by the industry, although they will be higher than in 2013 and will interest 3.6% of total sales (34 billion U.S. dollars);

obstacles to market entry of new molecules due to price containment measures by European Governments and the United States unemployment;

emerging markets growth, an element with positive effect.

Standard & Poor’s foresees a stable situation, instead. Aging population, typical of the mature markets, and unhealthy lifestyles (bad eating habits and lack of physical activity) throughout the world, will balance the negative trends. The emerging market’s growth will be driven by the Government’s actions to have a universal health coverage and the growth of the middle class and of its purchasing power. This will lead to a greater use of generics and OTC, while the introduction of new innovative medicines will depend on the economic development, the extension of health care reforms and reimbursement systems.

In 2017, the Chinese pharmaceutical expenditure will amount to 160 -190 billion dollars, and will have the same value of that of the top five European markets put together. China’s growth will be supported mainly by the prevalence of “Western” diseases in the first two or three main metropolises. The Chinese Government has the goal of achieving universal health coverage by 2020, and is implementing cost containment policies and is increasing the regulation. The market will be mainly made of generic, while innovative molecules will be rewarded only if locally manufactured. The pharmaceutical companies will have to change their model to have a local approach, establishing alliances with local companies to overcome regulatory obstacles and facilitate approvals and marketing.

In the U.S., the Obama of the health reform (Affordable Care Act) will have an effect mainly on the volume of generic drugs that already account for the 84% of prescriptions. The United States will continue to have a market price higher than in Europe.

Mergers and acquisitions will restart after some years of low transitions. In 2012 the M&A volume was 59 billion U.S. dollars in 2012, and 83 billion dollars in 2013: poor values respect to the mega mergers of last decade that could also see 50 billion US dollars in a single transition.

M&A will focus on the core business of the company divesting in areas not considered interesting and rethinking the research pipeline and revitalizing it purchasing new products.

Valeant Pharmaceuticals has offered $ 47 billion for Allergan, Novartis has just acquired the oncology division of GSK for $ 14.5 billion, has sold its vaccine division (with the exception of influenza vaccines ) to GSK for 7 1 billion and the veterinary products 5.4 billion to Lilly. Besides Novartis and GSK will create a joint venture for the consumer healthcare business.

In these months Pfizer has declared its proposal to buy Astra Zeneca.


Computers and new information technologies (digital economy, social media, mobile devices and big data), demographic changes (aging population) and shifts in wealth are transforming the pharmaceutical industry. These are the thoughts of pharmaceutical CEOs participating in the annual PricewaterhouseCoopers survey.

With regard to the growth outlook, half of the respondents is sure that his/her company will grow in the next three years, but only 29% is confident in an overall growth of the pharmaceutical industry.

The main reasons for concern are over-regulation (79%), Government’s response to the economic crisis (76%), persistence of a negative o slowed growth of developed economies (65%), tax burden (64%) and lack of intellectual property (64%).

For about a third of respondents, United States and China will be the major growth markets over the next 12 months. However, they are interested in making agreement in the Western countries and the U.S. and they are losing interest in the South Asia area.

In the next year, half of the CEO is planning to initiate a new strategic alliance or joint venture, while 32 % is going to outsource a process or function.

According to the survey respondents, pharmaceutical innovation is something more than the development of new products, as it also means improving processes, create new services and business models and make innovation repeatable, reliable and scalable. Thirty-eight per cent of respondents think that their R&D department is able to meet the new challenges of the industry, while the confidence drops to 26 % when it comes to the IT departments.

In this context, it is very important to be able to have properly trained and skilled staff to deal with changes in the industry: 64% of respondents said that the creation of skilled workers is a priority of their society.



Pharmaceutical companies: Top 10 by pharmaceutical sales

2013# 2012# Company 2013 (USD million) 2012 (USD million)
1 1 Pfizer 47878 51214
2 2 Novartis 47468 46732
3 ↑ 5 Roche 39163 38006
4 ↓ 3 Merck & Co. 37437 40601
5 ↓ 4 Sanofi 37124 39511
6 6 GlaxoSmithKline 33330 33335
7 ↑ 8 Johnson & Johnson 28125 25351
8 ↓ 7 AstraZeneca 25711 27925
9 9 Lilly 20962 20567
10 ↑ 11 AbbVie 18790 18380

Fonte: GlobalData


Pharmaceutical/biotech companies: Top 10 by biological/biotech sales

2013# 2012# Company 2013 (USD million) 2012 (USD million)
1 1 Roche 29174 27549
2 2 Amgen 16784 15516
3 ↑ 4 Novo Nordisk 13259 12126
4 ↑ 7 Sanofi 12365 11089
5 ↓ 3 AbbVie 11898 10766
6 ↑ 5 Pfizer 10739 10886
7 ↑ 6 Johnson & Johnson 10473 9233
8 8 Merck & Co. 8932 8264
9 ↑ 10 Lilly 6128 5797
10 ↓ 9 Biogen Idec 5658 5187

Fonte: GlobalData


Global Data’s Top 10 pharmaceutical products by global sales

2013# 2012# Product Company To treat 2013 (USD million) 2012 (USD million)
1 1 Humira (Adalimumab) AbbVie Rheumatoid arthritis / autoimmune diseases 11511 9628
2 2 Remicade* (Infliximab) Johnson & Johnson/ Merck & Co Rheumatoid arthritis / autoimmune diseases 9935 9136
3 3 Enbrel(Etanercept) Pfizer/Amgen Rheumatoid arthritis / autoimmune diseases 8897 8514
4 ↑ 5 Seretide/Advair (Salmeterol xinafoate/ Fluticasone propionate) GlaxoSmithKline Asthma 8356 7995
5 ↓ 4 Abilify* (Aripiprazole) Otsuka Holdings Depression / schizophrenia 8031 8321
6 ↑ 7 MabThera/Rituxan (Rituximab) Roche Rheumatoid arthritis 7410 7150
7↑ 8 Lantus*(Insulin glargine) Sanofi Diabetes 7343 6373
8 ↓ 6 Crestor (Rosuvastatin) AstraZeneca Cholesterol 6871 7520
9 ↑ 10 Avastin (bevacizumab) Roche Bowel cancer, Lung cancer, metastatic kidney cancer, Glioblastoma 6667 6145
10 ↓ 9 Herceptin* (Trastuzumab) Roche Breast cancer 6481 6278

*Patent will expire in 2014

Fonte: GlobalData


Moody’s: Stable outlook for global pharmaceutical industry due to return to growth in 2013.

Fitch Ratings’ Report: 2014 Outlook: Global Branded Pharmaceuticals

Standard & Poor’s – Top 10 Global Investor Questions For 2014: Pharmaceutical Sector


EMA recommends 81 medicines for marketing authorisation in 2013

FDA – Novel New Drugs: 2013 Summary

Alex Shimmings Record-breaking: Scrip analyzes 2013’s new product launches,

CPhI Pharma Insights: R&D Report

IMS Institute for Healthcare Informatics – The Global Use of Medicines: Outlook through 2017

PWC – 17 Annual Global CEO survey – Key findings in the pharmaceutical & life science industry