CHAPTRE - 2 EMERGING TRENDS IN GLOBAL

Chapter 2
CHAPTRE - 2
EMERGING TRENDS IN GLOBAL AND INDIAN
PHARMACEUTICAL INDUSTRY SINCE 1991
2.1: INTRODUCTION:The pharmaceutical industry is most advanced, competitive and highly
globalized industry. More over the pharmaceutical industry is characterized by
high research and development expenditures and extensive regulation of its
product compared with other manufacturing sector. The pharmaceutical
industry has also been affected by a high number of merger and acquisitions,
which have heightened efficiency. The world pharmaceutical industry has
grown at a rapid pace during the last three decades due to the tremendous
progress made in process technology and high rate of discovery and
introduction of new drugs made during the fifties and sixties.
2.2: WORLD PHARMACEUTICAL MARKET:The largest pharmaceutical markets are US, Europe and Japan. The
United State accounted for approximately 33 percent of the total world market
for ethical (prescription) pharmaceuticals in 1996, while Europe’s share
amounted to about 29 percent and Japan,s share was nearly 18 percent.1 In
2006 global pharmaceutical revenues was US$ 643 billion growing by 7
percent over the last year.
The share of the global pharmaceutical industry in the global healthcare
industry was 15 percent as reported by Indian Credit Rating Agency in January
2004.2 The share of pharmaceutical expenditure in the total global healthcare
expenditure varies from country to country. The size of the global
pharmaceutical industry was estimated at US$ 400.5 billion and around 88
percent of the market was accounted for by North America, Europe and Japan
in the year 2002.3 The global pharmaceutical industry reported a compound
31
Chapter 2
growth rate of 6.8 percent during 1992-2002.4 The pharmaceutical markets in
the developed regions witnessed healthy growth rates thereafter with growth
rate of around 12 to 15 percent in the US and 8 to10 percent in European
countries.5 The pharmaceutical industry which had been concentrated at the
top, underwent further consolidation. The top 10 players who together had
around 28 percent share of the global market in 1990, accounted for around 46
percent of the market in 2002.6
As in 2004, the top 20 companies accounted for about 66 percent of the
global market.7 The industry is truly global as most of the large companies have
a presence across the globe. For large European and US pharmaceutical
companies, over 40 percent of their total sales came from international
operations in 2003.8 Although the demand for pharmaceutical products is high
in the developing nations; their lack of purchasing power has skewed the
distribution of the market. However, the share of the developing nations in the
global pharmaceutical market has increased during the past decade (19902000).9 The global pharmaceutical market is forecasted to grow to US$ 842
billion in 2010, an equivalent compound growth rate of 6.9 percent over the
next five years. The global generic medicines market is worth over US$ 80
billion, which is 30 percent of total sales.
The turnover of the Indian pharmaceutical industry was estimated close
to Rs. 357.5 billion in financial year 2004.10 The industry reported an
impressive compounded annual growth rate of 16 percent between financial
year 1994 and financial year 2004 to emerge as an attractive segment of the
Indian manufacturing sector11. The Indian pharmaceutical industry ranked 13th
in value terms and 4th in volume terms globally, as in 2004, due to high
volume turnover and low drug prices in the country.12
2.3: WORLD PHARMACEUTICAL PRODUCTION:Pharmaceutical production means whether it is the manufacturing of
active ingredients in bulk form, basic chemicals, the preparation of finished
new medical entities, or the repacking of imported generic ingredients to make
32
Chapter 2
finished branded or unbranded generic products. Global production is
geographically a highly concentrated activity with over 90 percent of world
production located in a few high-income countries.13
Two third of the value of medicines produced globally is accounted for
by firm with headquarters in just five countries the USA, Japan, Germany,
France and UK. Production is also concentrated in a few key products and in a
relatively small number of companies, which often have factories and offices in
many countries.
New medicines with patent protection, which may have resulted from
costly research and development processes and where large markets are
anticipated, tend to be particularly expensive. Yet price and therapeutic gain
are not necessarily related. Large quantities of traditional and generic
medicines are manufactured and consumed, particularly in low income
countries and the therapeutic value of these is not reflected in available
monetary measures. For India and China in particular, the dollar value of
medicine transactions bears little relation to the health value of these products.
Where available, volume measures such as weight or the number of
prescriptions can change the global perspective on production and consumption
dramatically. However, they still cannot measure the health value of medicines.
India, for example, accounts for about 1 percent of the world’s production by
value, but 8 percent by volume (weight). The country ranks thirteenth in world
production by value but ranks fourth in the volume of pharmaceuticals
produced.14 However, these measures are still no closer to an index of
therapeutic value, and the available data are too limited to allow international
comparison or analysis of trends. Severity and prevalence of disease is more
rampant in poor developing nations where the marginalized and Poor’s access
to medicine is low. Herein provision of life saving drugs through not much in
value terms has more health volume. The total value of global pharmaceutical
production in 1999 was just over 320 billion US dollars.15
33
Chapter 2
Table No. 2.1 shows share of world pharmaceutical production of low,
middle and high income countries, following table shows that the high income
countries dominated in world pharmaceutical production. These countries share
TABLE NO: 2.1
SHARE OF LOW, MIDDLE AND HIGH INCOME COUNTRIES IN
WORLD PHARMACEUTICAL PRODUCTION: 1985 TO 1999
(In %)
Year
1985
1990
1999
Low Income
3.9
2.6
2.6
Middle Income
7
6.9
4.5
High Income
89.1
90.5
92.9
Source: World Health Organisation estimated based on data reported by UNIDO, OECD
Health Data, World Development Indicators 1987, 1992, 2001, International Financial
Statistics Yearbook 2002.comparision
FIGURE NO: 2.1
DISTRIBUTION OF SHARE OF LOW, MIDDLE AND HIGH INCOME
COUNTRIES IN WORLD PHARMACEUTICAL PRODUCTION: 1985 AND
1999 IN %
Year 1985
Year 1999
4% 7%
3%
5%
89%
Low Income
Middle Income
High Income
34
92%
Chapter 2
of production increased from 89.1 percent in 1985 to 92.9 percent in 1999. The
share of middle and Low Countries decreased over the same period. Low
income countries share of production from 3.9 percent in 1985 to 2.6 percent in
1999 and the same time middle income countries the share of production from
7 percent in 1985 to 4.5 percent in 1999.
Table No. 2.2 shows that the share of total pharmaceutical production of
the five top producing countries from 1985 to 1999. The combined share of
these countries fell from 78 percent of total production in 1985 to about 67
percent in 1999.
The USA remains the biggest single producer accounting almost one
third of total production and Japan second largest. The USA share of total
pharmaceutical production from 38 percent in 1985 to 31 percent in 1999,
during the period total production of USA was decreased but compared to other
countries USA is largest pharmaceutical producer in world market. Japan share
of total pharmaceutical production from 19 percent in 1985 to 16 percent in
1999. Together these two countries produced 57 percent of the world
pharmaceutical in 1985 and 47 percent in 1999.
TABLE NO: 2.2
SHARE OF THE TOP FIVE COUNTRIES IN WORLD
PHARMACEUTICAL PRODUCTION
(In %)
Year
1985
1990
1999
USA
38
31
31
Japan
19
20
16
Germany
8
10
6
France
7
8
8
UK
6
7
6
Source: As of Table No.2.1
35
Chapter 2
FIGURE NO: 2.2
DISTRIBUTION OF SHARE OF THE TOP FIVE COUNTRIES IN
WORLD PHARMACEUTICAL PRODUCTION: 1985 AND 1999 IN %
Year 1985
Year 1999
8%
9%
9%
12%
10%
24%
49%
46%
9%
USA
Japan
24%
Germany
France
UK
The USA lost some of its market share to Japan and Germany between 1985
and 1990. During the period 1985 to 1990, the market share of the Germany
was 8 percent to 6 percent. The UK share of total pharmaceutical production
from 6 percent in 1985 to 6 percent in 1999.
2.4: GLOBAL PHARMACEUTICAL SALES:Sales and marketing capability are fast becoming an increasingly
important source of competitive advantage. In 2007, the total global
pharmaceutical sales reached to US$ 712 billion. Among the ten leading
international markets combined, which account for 81 percent of world wide
sales, audited growth was just 5.7 percent down from 7.2 percent in 2004. Sales
provide an additional measure of the consumption of pharmaceuticals.
Production measures the output of all manufactures. Consumption means use
of domestic pharmaceutical drugs plus import of drugs and minus of
pharmaceutical export, it is measurement of output of pharmaceutical product
or sales of pharmaceutical product.
36
Chapter 2
TABLE NO: 2.3
GLOBAL PHARMACEUTICAL SALES, 1997 TO 2007
(Value in US $ Billion)
Year
Global Sales
Annual %
Change
1997
289
-
1998
297
2.76
1999
332
11.78
2000
357
7.53
2001
387
8.40
2002
426
10.07
2003
493
15.72
2004
560
13.59
2005
605
8.03
2006
649
7.27
2007
712
9.70
CGR from
10.07
1991-2006
Increase in
2.46
2007 over
1997
Source: IMS Health, Annual World Review Report 2007, www.imshealth.com
37
Chapter 2
FIGURE NO: 2.3
TRENDS OF GLOBAL PHARMACEUTICAL SALES, 1997 TO 2007
(Values in US $ Billion)
Values in US$ billion
800
700
600
500
400
300
200
100
Year
07
20
06
20
05
20
04
20
02
03
20
20
00
01
20
20
99
19
98
19
19
97
0
Global Sales
Table No. 2.3 shows global pharmaceutical sales during the period
under study has increased tremendously. The global pharmaceutical sale was
only US$ 289 billions in 1997, which increased to US$ 712 billion in 2007
representing more than 2.46 fold over the period of 11 years. Its compound
growth rate was 10.07 percent during the period under study. However, it is
found from the following table that the global pharmaceutical sales started to
increase rapidly since 1997.
Table No. 2.3 gives details of global pharmaceutical sales for the period
1997 to 2007. Data in table reveals that from 1997 to 2007: total sale of the
global pharmaceutical industry shows continuous growth the period under
study. Total sales of global pharmaceutical industry increased from US$ 289
38
Chapter 2
billion in 1997 to US$ 357 billion in 2000 and further to US$ 560 by 2004.
This global sale by 2007 was US$ 712 billion.
In 1998 annual average growth rate of global sale was by only 2.76
percent they were rosé to 11.78 percent in 1999. In 2000, global
pharmaceutical sales shows decreased annual average growth rate of 7.53
percent. There was wide range of fluctuation in the annual average growth of
global pharmaceutical sales during the study period. In 2001 annual average
growth rate of global sale was increased by 8.40 percent annually compared to
earlier years. Again, they show the decreased annual average growth rate of
13.59 percent in 2004. In 2003 annual average growth rate, increased global
sale was highest records by 15.72 percent. Later on period, it was decreased to
7.27percent in 2006. The annual average growth rate of global sale showed ups
and down trends during the period under study. Global pharmaceutical sales
roes by 2.46 fold in 2007 over 1997.
Compound growth rate of global pharmaceutical sales during the period
1997 to 2007 was 10.07 percent.
2.4.1: GLOBAL PHARMACEUTICAL SALES BY REGION:The majority of global pharmaceutical sales originate in the triad (three)
means US, EU and Japan with ten key countries accounting for over 80
percentage of global market. North America has been by far the largest
pharmaceutical market by volume and value means US$ 304.5 billion in 2007
half of global sales, with the strongest growth among key markets, contributing
51 percentage global market growths in 2002, the US accounted for a 45.9
percentage of blockbuster sales compared with only 8.8 percentages from
Japan and 31.1 percentages from Europe.
Europe has traditionally been the second largest market for
pharmaceutical, with sales of US$ 206.2 billion in 2007. Japan made up the
third part of the triad with top five markets (Germany, France, Italy, UK and
Spain) to continue contributing sales of EU. European markets each had their
39
Chapter 2
own unique operating environments. The pharmaceutical market in Latin
America had proved highly volatile, reflecting underlying economic trends.
Table No. 2.4 indicate that global pharmaceutical sales by region means
sales of North America, Europe, Japan, Latin America and Asia, Australia and
Africa these countries sales from US$. 317.2 billion In 2000, which raised to
US$.663.5 billion in 2007. Sale of North America in 2000 was US$ 152.8
billion, which increased to US$ 304.5 billion in 2007 and percentage of sales in
total sale from 48.2 percent in 2000, which decreased to 45.9 percent in
2007.The sale of North America shows decreasing trends during the period
under the study. The sale of North America has increased 1.99 fold in 2007
over 2000. The compound growth rate was 10.03 percent during the period
under study.
Sale of European Countries in 2000 was US$ 75.3 billion, which
increased to US$ 206.2 billion in 2007. Percentage of sales of European
countries was 23.7 percent in 2000, which in creased to 31.1 percent in 2007. It
means percentage of sales of European Countries shows increasing trend
during the period 2000 to 2007.The sale of European Countries has increased
2.73 fold in 2007 over 2000. Its compound growth rates was16.43 percent
during the period under study. In 2000, the Japan sale in world market was US$
51.5 billion and further rose to US$ 58.5 billion in 2007, came down to US$
47.6 billion, US$ 46.9 biillion and US$ 56.7 billion in 2001, 2002 and 2006.
However, in the next year 2007 went up to US$ 58.5 billion. The sale of Japan
has increased 1.13 fold in 2007 over 2000. Its compound growth rates being
3.17 percent during the period under study.
Sales of Latin America also indicate the ups and downs in growth
trends during 2000 to 2007. In 2000 sales in world, market was US$18.9 billion
and they rose to US$ 32 billon in 2007 and decreased to US$ 16.5 billion in
2002. Further increased to US$ 17.4 billion in 2003. In 2000 and 2001 sale of
Latin America was same to US$ 18.9 billion. The sale of Latin America has
increased 1.69 fold in 2007 over 2000. Its compound growth rates were 8.39
percent.
40
Chapter 2
TABLE NO: 2.4
COMPOSITION AND GROWTH OF GLOBAL PHARMACEUTICAL
SALES BY REGION
(Value in US $ Billion)
Region
North Europe
America
Japan
Latin
Asia
America (excluding
Japan),
Africa &
Australia
152.8
75.3
51.5
18.9
18.7
(48.2)
(23.7)
(16.2)
(6.0)
(5.9)
181.8
88
47.6
18.9
27.9
(50)
(24)
(13)
(5)
(8)
203.6
90.6
46.9
16.5
31.6
(51)
(22)
(12)
(4)
(8)
229.5
115.2
52.4
17.4
37.3
(49)
(25)
(11)
(4)
(8)
248
144
58
19
40
(47.8)
(27.8)
(11.1)
(3.8)
(7.7)
265.7
169.5
60.3
24
46.4
(47)
(30)
(10.7)
(4.2)
(8.2)
289.9
181.8
56.7
27.5
52
2006
(47.7)
(29.9)
(9.3)
(4.5)
(8.6)
2007
CGR
304.5
(45.9)
10.03
206.2
(31.1)
16.43
58.5
(8.8)
3.17
32
(4.8)
8.39
62.2
(9.4)
16.38
Increase in
2007 over
2000
1.99
2.73
1.13
1.69
3.32
2000
2001
2002
2003
2004
2005
Source: As of Table No.2.3
Note: Figures into brackets indicate percentage to sale
41
Chapter 2
FIGURE NO. 2.4
DISTRIBUTION OF GLOBAL PHARMACEUTICAL SALES BY
REGION IN %
Year 2007
Year 2000
6%
6%
9%
5%
9%
16%
46%
48%
11
24%
31%
North America
Europe
Japan
Latin America
Asia (excluding Japan), Africa & Australia
Sales of Asia (excluding Japan), Africa and Australia was to US $ 18.7
billion in 2000, which was increased to US$ 62.2 billion in 2007 and
percentage of sales in total sale from 5.9 percent in 2000, which increased to
9.4 percent in 2007.The sale of Asia (excluding Japan), Africa and Australia
shows increasing trends during the period under the study. The sale of Asia
(excluding Japan), Africa and Australia has increased 3.32 fold in 2007 over
2000. Compound growth rate of sales of this region was 16.38 percent during
the period under study. Sales data of this region very apply indicates that this
region has large geographical area and population, so markets are large and rise
in per capital incomes demand for medicines also is rising and therefore this
region is important for sales.
42
Chapter 2
2.4.2: SALES BY GEOGRAPHICAL AREAS:
The global pharmaceutical industry is a multinational industry that is
highly regulated, capital intensive, and which is driven by large research and
development expenditures. The industry is primarily privately owned and is
technologically sophisticated. The strong growth in the five European markets
that joined the European Union. Emerging markets such as China, South
Korea, Brazil, Russia and Turkey experienced double digit growth signaling an
important shift occurring in the pharmaceutical industry. As growth in the
mature markets flatten, industry attention is shifting to smaller, developing
markets that are doing exceptionally well. Many of these developing nations
are experiencing significant gross domestic product growth, which helps
finance the healthcare systems, increase patient access and fuels the Double
digit growth. Pharmaceutical measures are gearing up to the challenges of
meeting the unmet needs of these markets.
According to IMS Health as stated in the 2004 Annual Report, the
United States, the European Union and Japan comprise the three major
pharmaceutical markets which together represent 91.5 percent of world sales;
and the U.S. market alone accounts for about 70.4 percent of world sales. Not
surprisingly, all big Pharmaceutical companies to a significant extent
concentrate their resources on these markets, especially on the U.S. market.
At the same time, although the share of world pharmaceutical sales in
developing countries at this point of time is much lower, India’s and Pakistan
sales is very low it is to US$ 628.3 million. Share of world pharmaceutical
sales only 0.3 percent. They show much faster growth rate than developed
countries do. For example, the China, 9th largest world market, showed a 26
percent sales increase in 2004, followed by Thailand (16% growth) and Egypt
(15% growth).
Some Latin American countries, such as Mexico, Brazil,
Argentina and Venezuela also show much faster sales growth rate than average
worldwide. Therefore, developing countries contain a significant potential for
further expansion of pharmaceutical industry in the future.
43
Chapter 2
TABLE NO: 2.5
SALES BY GEOGRAPHIC AREA*, PhRMA MEMBER COMPANIES
2005
(Value in US $ Million)
Area
Sales
1- Africa
1- Africa
1177.2
2-Americas
1- U.S
166155.5
2-Canada
5401.4
3-Latin America
5703.3
3- Asia-Pacific
3916.9
1-Asia-Pacific(except Japan)
2-India&Pakistan
628.3
3-Japan
8407.2
4- Australia
1-Austrlia&New Zealand
2682.3
5- Europe
1-France
7196.8
2-Germany
5530.1
3-Italy
5290.0
4-Spain
4268.7
5- U.K
4816.8
8655.6
6-Other Western European nations
7-Central - Eastern European
2366.6
nations
786.8
8-Other Eastern European nations
2027.9
6- Middle East
1025.1
7- Uncategoriesed
236036.5
TOTAL R&D
Source: - Pharmaceutical Research
Membership Survey, 2007
Share
0.5
70.4
2.3
2.4
1.7
0.3
3.6
1.1
3.0
2.3
2.2
1.8
2.0
3.7
1.0
0.3
0.9
0.4
100.0
and Manufacturers of America, PhRMA Annual
*Sales Abroad includes sales generated outside the United States by U.S.-owned PhRMA
member companies and sales generated abroad by the U.S. divisions of foreign-owned
PhRMA member companies. Sales generated abroad by the foreign divisions of foreign
owned PhRMA member companies are excluded. Domestic sales, however, includes sales
generated within the United States by all PhRMA member companies.
Note: *Central & Eastern European nations includes Cyprus, Czech Republic, Estonia,
Hungary, Poland, Slovenia, Bulgaria, Lithuania, Latvia, Romania, Slovakia and Malta,
* Other Eastern European nations including Russia, and newly Independent states.
*Middle East including Saudi Arabia, Yemen, United Arab Emirates, Iraq, Iran, Kuwait,
Israel, Jordan, Syria, Afghanistan, Turkey and Qatar.
44
Chapter 2
Table No. 2.5 gives details of growth of the sales by the geographic area
and PhRMA member country above table shows sales value and percentage of
sales of member country in the year 2005. Compared to other countries USA
sale contribution is high in world sale market. In 2005 sale of USA was to
US$166155.5 million and percent of sales in total sale is 70.4 percent in 2005.
However, it is from above table that the sale of European Union to US$
38911.4 million in 2005 and share of sales in total sales is 16.3 percent. Five
major countries include under European Union respectively these are France,
Germany, Italy, Spain, UK, Other Western European Nations, Central and
Eastern European Nations and Other Eastern European Nations. France and
other Western European Nations sale was high compared to other European
Country respectively it was to US$ 7196.8 million, US$ 8655.6 million in 2005
and share of sales in total sales 3.0 percent and 3.7 percent.
2.4.3: INTERNAL AND EXTERNAL SALE OF USA AND PhRMA
MEMBER COUNTRIES:Table No. 2.6 shows the total USA sales and sales of abroad means
sales of PhRMA member companies from 1991 to 2006.
The total sales of USA and PhRMA member companies have shown a
continuous increasing trend since the study period. Total sales to states were
US$ 66535.6 million in 1991 increased to US$ 245801 million in 2006. In
1995 sales of USA and PhRMA member companies was US$ 91039 million,
which rose to US$ 145958.4 million in 2000 and further went up to US$
230557.9 million in 2004.
The annual average growth rate of sales of USA and PhRMA member
companies showed fluctuation trend during the period under study. In 1991, the
annual average growth rate of total sales was 14.1 percent, which was rose to
17.1 percent in 1999.However; they showed decreasing total sales of USA and
PhRMA member companies’ trend during the period 1992 to 1998 and 2000 to
2006 annual average growth rate of total sales was decreased. The highest
45
Chapter 2
TABLE NO: 2.6
COMPOSITION AND GROWTH OF USA SALES AND SALES OF
OTHER COUNTRY**, PhRMA MEMBER COMPANIES: - 1991 TO
2006
(values inUS$ Million)
Year
1991
Annual
Annual
%
Sales
%
USA
Sales
Change Abroad Change Total
44304.5
15.1 22231.1
12.1 66535.6
Annual
%
Change
14.1
1992
48095.5
8.6
25744.2
15.8 73839.7
11
1993
48590.9
1
26467.3
2.8 75058.2
1.7
1994
50740.4
4.4
26870.7
1.5 77611.1
3.4
1995
57145.5
12.6
33893.5 ****
1996
64741.4
13.3
36838.7
8.7 101580.1
11.6
1997
71761.9
10.8
39086.2
6.1 110848.1
9.1
1998
81289.2
13.3
43320.1
10.8 124609.3
12.4
1999
101461.8
24.8
44496.6
2.7 145958.4
17.1
2000
115881.8
14.2
45199.5
1.6 161081.3
10.4
2001
130715.9
12.8
47886.9
5.9 178602.8
10.9
2002
139136.4
6.4
53697.4
12.1 192833.8
8
2003***
148038.6
6.4
60914.4
13.4 208953
13.4
2004***
160751
8.6
69806.9
14.6 230557.9
14.6
2005
166155.5
3.4
69881
0.1 236036.5
0.1
2006*
174667.4
5.1
71133.6
1.8 245801
1.8
Increase
in 2007
over 1991 3.94
CGR
10.98
10.8 3.19
8.17
91039
10.2 3.69
10.08
****
10.5
*Estimated
**Sales Abroad includes sales generated outside the United States by U.S.-owned PhRMA
member companies and sales generated abroad by the U.S. divisions of foreign-owned
PhRMA member companies. Sales generated abroad by the foreign divisions of foreignowned PhRMA member companies are excluded. Domestic sales, however, includes sales
generated within the United States by all PhRMA member companies.
***Recalculated for updated data.
****Sales abroad affected by merger and acquisition activity.
Note: Total values may be affected by rounding
Source: As of Table No. 2.5
46
Chapter 2
FIGURE NO: 2.5
DISTRIBUTION OF USA SALES AND SALES OF OTHER
COUNTRY**, PhRMA MEMBER COMPANIES: - 1991 AND 2006
(Figures in US $ Million)
Year 2006
Year 1991
29%
33%
67%
71%
USA Sales
USA Sales
Sales Abroad
Sales Abroad
annual average growth rate in 1999 was 17.1 percent. Total sales increased
3.69 fold in 2006 over 1991.
Compound growth rate of total sales during the study period was 10.08
percent.
Table No. 2.6 also explains the growth of USA sales from 1991 to 2006.
Sales of USA to states also reported increasing trend. In 1991 total amount of
sales of USA to states were US$ 44304.5 million, which rose to US$ 130715.9
million in 2001 and in 2003 sales of USA to states increased to US$ 148038.6
million. They were increased to US$ 166155.5 million in 2005.
The annual average growth rate of sales of USA was 12.1 percent in
1991; it got increased to 15.8 percent in 1992 and further decreased to 2.8
percent in 1993. Later on it increased to 14.6 percent in 2004. However, in
47
Chapter 2
2000 annual average growth rate decreased that is 1.6 percent. Sales of USA to
states increased to 3.94 fold in 2006 over 1991.
Compound growth rate of USA sales to states during the study period
was 10.98 percent.
Table No. 2.6 also indicates sales in export market mean PhRMA
companies sales from 1991 to 2006. In 1991 total amount of sales of abroad to
states were US$ 22231.1 million, which rose to US$ 45199.5 million in 2000
and in 2004 sales of PhRMA member companies to states increased to US$
69806.9 million. They were increased to US$ 71133.6 million in 2006.
In 1991 annual average growth rate sales of abroad of PhRMA member
companies was 12.1 percent and it was only 1.5 percent in 1994. The annual
average growth rate sales of abroad of PhRMA member companies showed ups
and downs trend during the period under study. In 2002 annual average growth
rate, sales of abroad of PhRMA member companies increased by 12.1 percent
and in 2005 sales to states decreased means annual average growth rate of 0.1
percent. Abroad sales to states increased by 3.19 fold in 2006 over 1991.
Compound growth rate of abroad sales to states was 8.17 percent during
the study period.
Thus, the above data analysis reveals that all two components of total
sales have shown a rising trends in this growth during the period under study
and compound growth rate of all these sales was not more than 10 percent
during the period under study.
2.5: RESEARCH AND DEVELOPMENT EXPENDITURE OF USA AND
PhRMA MEMBER COUNTRY:Research and Development is the cornerstone of the pharmaceutical
industry since the extent and success of company research and development
activities largely determine the future pattern of corporate earning and growth.
The larger companies in the industry in general and multinational sector in
particular are highly research and development intensive. Research and
development intensity in terms of sales, net income and cash income (net
48
Chapter 2
income after tax). Research and development from 1991 to 2006 in the USA
indicated that the pharmaceutical industry composition of research and
development expenditure was 77.7 percent it is higher than world Pharma
countries.
Table No. 2.7 shows the growth and composition of USA research and
development expenditure and PhRMA member companies from1991 to 2006.
The table also shows the growth of research and development expenditure both
are in absolute terms as well as their annual average growth rate in percentage.
Over the past decade, the USA pharmaceutical industry research and
development spending has more than doubled. This increase in spending is
largely due to the increasing level of attrition, which helped to quadruple the
cost of discovering and developing a New Molecular Entity (NME) since 1987.
In 2001, the cost to discover and develop a New Molecular Entity ran to
roughly US$ 800 million.16
Total research and development expenditure have consistently increased
in absolute terms during the period under study. In 1991 research and
development expenditure were US$ 9705.4 million and they were increased to
US$ 42937.5 million in 2006. In 1999 to research and development
expenditure were US$ 22690.7 million, which was increased to US$ 39857.6
million in 2005.
The annual average growth rate of research and development
expenditure of USA and PhRMA member companies showed fluctuation trend
during the period under study. In 1991, the annual average growth rate of total
research and development expenditure was 15.3 percent, however; they showed
decreasing total research and development expenditure of USA and PhRMA
member companies. The decreased growth rate of 5.6 percent in 1994. In 1996
total research and development, expenditure increased annually 11.2 percent. In
1998, these research and development expenditure again showed decreased an
annual average growth rate of 10.8 percent. In 2000, annual average growth
rate of total research and development expenditure was 14.7 percent. However,
49
Chapter 2
TABLE NO: 2.7
COMPOSITION AND GROWTH OF US RESEARCH AND
DEVELOPMENT AND RESEARCH AND DEVELOPMENT ABROAD,
PhRMA MEMBER COMPANIES: - 1991 TO 2006
(Dollar figures in Million)
Annual
Annual
%
Abroad*** %
Change R and D
Change
16.5
1776.8
9.9
Total R
and D
9705.4
Annual
%
Change
15.3
Year
1991
US R
and D
7928.6
1992
9312.1
17.4
2155.8
21.3
11467.9
18.2
1993
10477.1
12.5
2262.9
5
12740
11.1
1994
11101.6
6
2347.8
3.8
13449.4
5.6
1995
11874
7
3333.5
***
15207.5
***
1996
13627.1
14.8
3278.5
-1.6
16905.6
11.2
1997
15466
13.9
3492.1
6.5
18958.1
12.4
1998
17127.9
11
3839
9.9
20966.9
10.8
1999
18471.1
7.4
4219.6
9.9
22690.7
8.2
2000
21363.7
15.7
4667.1
10.6
26030.8
14.7
2001
23502
10
6220.6
33.3
29722.6
14.4
2002
25655.1
9.2
5357.2
-13.9
31012.3
4.2
2003
27064.9
5.5
7388.4
37.9
34453.3
11.1
2004
29555.5
9.2
7462.6
1
37018.1
7.4
2005
30969
4.8
8888.6
19.1
39857.6
7.7
2006*
33967.9
9.7
9005.6
1.3
42973.5
7.8
Increase
in 2007
over
1991
CGR
4.28
10.19
12.8
5.06
11.44
16.6
4.42
10.44
13.4
Sources: - As of Table No. 2.5
* Estimated **R and D Abroad includes expenditures outside the United States by U.S.owned PhRMA member companies and R and D conducted abroad by the U.S. divisions of
foreign-owned PhRMA member companies. R and D performed abroad by the foreign
divisions of foreign-owned PhRMA member companies is excluded. Domestic R and D,
however, includes R and D expenditures within the United States by all PhRMA member
companies.***R and D Abroad affected by merger and acquisition activity
50
Chapter 2
FIGURE NO: 2.6
DISTRIBUTION OF US RESEARCH AND DEVELOPMENT AND
RESEARCH AND DEVELOPMENT ABROAD, PhRMA MEMBER
COMPANIES: - 1991 AND 2006
(Dollar figures in Million)
Year 2006
Year 1991
18%
21%
79%
82%
US R and D
US R and D
Abroad*** R and D
Abroad*** R and D
FIGURE NO: 2.7
TRENDS OF US RESEARCH AND DEVELOPMENT AND
RESEARCH AND DEVELOPMENT ABROAD, PhRMA MEMBER
COMPANIES: - 1991 TO 2006
(Dollar figures in Million)
50000
45000
40000
35000
25000
20000
15000
10000
5000
Year
US R and D
51
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0
1991
Value
30000
Abroad R and D
Chapter 2
2002 these total research and development expenditure again showed decreased
growth rate of 4.2 percent.
During 2003, annual average growth rate of total research and
development expenditure increased to 11.1 percent and again in 2004 this
expenditure shows the very less annual average growth rate it was 7.4 percent.
In 2006, annual average growth rate these research and development
expenditure increased to 7.8 percent. Total research and development
expenditure of USA and PhRMA member companies increased 4.42 fold in
2006 over 1991.
Compound growth rate of Total research and development expenditure
of USA and PhRMA member companies during the study period was 10.44
percent.
As successive research and development expenditure are favorable to
USA and PhRMA member companies and shows continuously increasing
trend. In 1991, the total amount of USA research and development expenditure
was US$ 7928.6 million, which was rose to US$ 11101.6 million in 1994. In
2004, the USA research and development expenditure increased to US $
29555.5 million and further raised US$ 33967.9 million in 2006.
In 1991, the annual average growth rate of US research and
development expenditure was 16.5 percent, however; they showed decreasing
US research and development expenditure. The decreased growth rate of 12.5
percent in 1993. In 1994, there was very less annually growth of 6 percent.
Again in 1996 it increased by 14.8 percent. In 1998 annual average growth rate
of research and development expenditure was decreasing that is 11 percent and
in 2000 annual average growth rate increased by 15.7 percent. Later on period,
it was decreasing. In 2001, annual average growth rate of research and
development expenditure increased to 10 percent. In 2004, annual average
growth rate of research and development expenditure increased to 9.2 percent,
which was declined to 4.8 percent in 2005.The annual average growth rate of
US research and development expenditure showed ups and downs trend during
52
Chapter 2
the period under study. Total US research and development expenditure of
USA increased 4.28 fold in 2006 over 1991.
Compound growth rate of Total research and development expenditure
of USA during the study period was 10.19 percent.
Table No. 2.7 also shows that research and development expenditure of
abroad means PhRMA member companies from 1991 to 2006. In 1991 total
amount of research and development expenditure of PhRMA member
companies were US$ 1776.8 million and they increased to US$ 9005.6 million
in 2006. Abroad research and development expenditure was continuous
increasing trend during the period under study.
In 1991 annual average growth rate of abroad research and development
expenditure was by only 9.9 percent they were rose to 21.3 percent in 1992. In
1993 and 1994, research and development expenditure decreased annual
average growth rate of 5 percent and 3.8 percent. There was wide range of
fluctuation in the annual average growth of abroad research and development
expenditure during the study period. In 1996, research and development
expenditure shows a negative annual average growth rate of -1.6 percent. In
2001 they increased by 33.8 percent annually compared to earlier years. Again
they shows negative annual average growth rate of -13.6 percent in 2002. In
2003 average growth rate, increased research and development expenditure was
highest record by 37.3 percent. Later on year 2004, it decreased of 1 percent. In
2005 annual average growth of abroad research and development expenditure
increased to 19.1 percent which was declined to 1.3 percent in 2006. Total
abroad research and development expenditure increased 5.06 fold in 2006 over
1991.
Compound growth rate of total abroad research and development
expenditure during the study period was 11.44 percent.
Table No.2.8 indicates research and development as a percentage of
sales. Following table shows research and development expenditure as a
percentage of sales of USA and PhRMA member companies from 1991 to
2006. In this period, data gives details of USA and PhRMA member
53
Chapter 2
companies’ research and development expenditure as a percentage of sales.
USA research and development expenditure as a percentage of sales increased
from 17.9 percent in 1991 to 21.9 percent n 1994 further increased to 19.4
percent in 2006. In 1995, USA research and development expenditure was 20.7
percent compared to previous year it was less, however they showed increased
investment of research and development expenditure of 21 percent to 21.6
percent in 1996 and 1997. In the year 1998 to 1999, 2000 to 2001 and 2002 to
2003 investment of research and development expenditure of USA was ups
and downs, its rang 21.1 percent , 18.4 percent and 18.3 percent. In 2005
research and development expenditure as a percentage of sales of USA was
18.6 percent. USA research and development expenditure investment shows
fluctuating trend during the period under study.
Table No.2.8 reports the percentage of the total research and
development expenditure as a percentage of sales of PhRMA member countries
for the period 1991 to 2006. PhRMA member research and development
expenditure also show a trend of growth. However, it has some fluctuation in it.
PhRMA member companies research and development expenditure less than
USA Pharmaceutical companies. It was 7.99 percent in the initial period of
study to 8.54 percent in 1993 and again it increased 9.83 percent in 1995. But
in 1996, it decreased to 8.89 percent. However, since 1996 it indicates decline
with fluctuations in contrast in some years it show high and less of Research
and development expenditure of PhRMA member companies. In 1996, it was
to 8.93 percent, which declined in the next year to 8.86 percent.
Table No.2.8 also reveals research and development expenditure as a
percentage of sales of PhRMA member companies during the period under
study and this table explains the percentage of research and development
expenditure to total sales of USA and PhRMA member companies. It was 14.6
percent in 1991, which was increased 17.5 percent in 2006. The percentage of
research and development as a percentage of sales shows ups and downs trend
during the period under study. However, as successive research and
54
Chapter 2
development investments are favorable to USA and PhRMA member
companies.
TABLE NO: 2.8
RESEARCH AND DEVELOPMENT AS A PERCENTAGE OF SALES
PhRMA MEMBER COMANIES 1991 TO 2006
(%)
Total R and
D as a % of
Total Sales
Year
US R and
D as a%
of US
Sales
PhRMA
member R
and D as a%
of PhRMA
member
Sales
1991
17.9
7.99
14.6
1992
19.4
8.37
15.5
1993
21.6
8.54
17
1994
21.9
8.73
17.3
1995
20.7
9.83
16.7
1996
21
8.89
16.6
1997
21.6
8.93
17.1
1998
21.1
8.86
16.8
1999
18.2
9.48
15.5
2000
18.4
10.32
16.2
2001
18.3
12.99
16.7
2002
18.4
9.97
16.1
2003
18.3
12.12
16.5
2004
18.4
10.69
16.1**
2005
18.6
12.719
16.9**
2006
19.4
12.66
17.5
Sources: - As of Table No. 2.5
In 1992, 1993, 1994 total research and development expenditure of USA
and PhRMA member companies was increased. Its range of 15.5 percent to
17.3 percent, but from 1995 to 2005 fluctuating trend.
55
Chapter 2
TABLE NO: 2.9
RESEARCH AND DEVELOPMENT BY GEOGRAPHIC AREA*,
PhRMA MEMBER COMPANIES 2005
(Values in US$ Million)
Area
1- Africa
1- Africa
2-Americas
1- U.S
2-Canada
3-Latin America
3- Asia-Pacific
1-Asia-Pacific(Japan)
2-India&Pakistan
3-Japan
4- Australia
1-Austrlia&New Zealand
$
28
28
Shares
0.1
31624.1
30969.9
479.3
174.9
77.7
1.2
0.4
1153.8
117.5
10.9
1025.4
144.6
144.6
0.3
0
2.6
0.4
3688.8
5- Europe
1-France
2-Germany
3-Italy
4-Spain
5- U.K
6-Other Western Country
7-Central&Eastern Europe
8-Other Eastern Europe
6- Middle East
7- Uncategoriesed
TOTAL R AND D
498.8
548.2
342.1
208.8
2090.9
2835.9
131.2
113.4
37.7
101.3
39857.9
1.3
1.4
0.9
0.5
5.2
7.1
0.3
0.3
0.1
0.3
100.00%
Source: As of Table No. 2.5
*Sales Abroad includes sales generated outside the United States by U.S.-owned
PhRMA member companies and sales generated abroad by the U.S. divisions of foreignowned PhRMA member companies. Sales generated abroad by the foreign divisions of
foreign owned PhRMA member companies are excluded. Domestic sales, however, includes
sales generated within the United States by all PhRMA member companies.
Note: *Central & Eastern European nations includes Cyprus, Czech Republic, Estonia,
Hungary, Poland, Slovenia, Bulgaria, Lithuania, Latvia, Romania, Slovakia and Malta,
* Other Eastern European nations including Russia, and newly Independent states.
*Middle East including Saudi Arabia, Yemen, United Arab Emirates, Iraq, Iran, Kuwait,
Israel, Jordan, Syria, Afghanistan, Turkey and Qatar.
56
Chapter 2
Table No.2.9 indicates research and development expenditure of
PhRMA member companies. United State alone account for about 77.7 percent
of world research and development expenditure.
At the same time, although the share of world pharmaceutical research
and development expenditure in developing countries at this point of time is
much lower, India’s and Pakistan research and development expenditure is
very low means it is to US$ 10.9 million. Share in world pharmaceutical
research and development expenditure only 0 percent. They show negative
growth rate than developed countries do.
However, it is found above table that the research and development expenditure
of European Union to US$ 6769.3 million in 2005 and share of research and
development expenditure in total research and development expenditure is 17
percent. Five major countries include under European Union respectively these
are France, Germany, Italy, Spain, UK, Other Western European Nations,
Central and Eastern European Nations and Other Eastern European Nations. In
2005 Africa’s research and development, expenditure to US$ 28 million and
share has only 0.1 percent at the same time Australia research and development
expenditure to US$144.6 million and share in total research and development
0.4 percent.
2.6: GLOBAL TRADE IN PHARMACEUTICALS:During the 1990s, trade in pharmaceuticals grew substantially
faster than production. Table No.2.10 shows that, in constant price terms, the
international trade in pharmaceuticals has expanded dramatically since 1980,
growing three times faster than current prices indicate.
International trade in pharmaceuticals is dominated by the high-income
industrialized countries. In 1999, they accounted for 93 percent of global
exports and 80 percent of global imports, by value. This concentration in trade
has increased since 1980. Between 1980 and 1999, middle income countries’
share of world exports fell, and the shares of both low and middle income
countries in world imports dropped significantly. With the notable exception of
57
Chapter 2
TABLE NO: 2.10
GLOBAL TRADE IN PHARMACEUTICAL 1980 TO 1999
(Value in US$ Billion)
Direction of trade
1980
1990
1999
Exports (current price)
14.53
36.04
104.22
Exports (constant 1995 price)
5.35
28.79
117.86
Imports(current price)
13.54
34.64
104.80
Imports (constant 1995 price)
4.98
27.67
118.53
Source: World Health Organisation Annual Report 2004, The World Medicines Situations,
Commodity Trade Statistics Section, ITSB, United Nation Statistic Division, New York, US
pharmaceutical price index, P.No.22
Japan, the countries, which contribute most to world, trade both in exports and
in imports are the world’s major producers: the USA, UK, Germany and
France. Japan, the world’s second largest producer, continues to produce
primarily for the domestic market and since 1980 has reduced its share of the
world’s pharmaceutical imports.
2.6.1: PHARMACEUTICALS EXPORT PATTERN:Table No. 2.11 shows the shares of countries by income level in
world pharmaceutical exports from 1980 to 1999. The share of high-income
countries rose from 1980 to 1999. In 1980 share of high income countries was
to 90.5 percent to 91.8 percent in 1985 of the world total again in 1990 it was
increased to 92.8 percent but in 1995 it was decreased to 91.5 percent of the
world total. High income countries export increased steadily from 1980 to
1999.
While middle income countries exports dropped from 8.3 percent to 4.2
percent. Middle-income countries export share was fluctuating from 1980 to
58
Chapter 2
TABLE NO: 2.11
SHARE OF LOW, MIDDLE AND HIGH INCOME COUNTRIES IN
WORLD PHARMACEUTICAL EXPORETS
(In %)
Year
1980 1985 1990
1995 1999
Low Income
1.1
1.1
3.3
3.6
2.9
Middle Income
8.3
7.1
3.9
4.9
4.2
High Income
90.5
91.8
92.8
91.5
92.9
Source: As of Table No.2.10
FIGURE NO: 2.8
DISTRIBUTION OF SHARE OF LOW, MIDDLE AND HIGH INCOME
COUNTRIES IN WORLD PHARMACEUTICAL EXPORETS
(IN %)
Year 1980
Year 1999
3%
1% 8%
91%
4%
Low
Income
Middle
Income
High
Income
59
93%
Chapter 2
1999. In 1990 Middle income countries, export share was very low
compared to other year. The export share of some low income countries such
as India, Pakistan and Indonesia more than doubled from 1.1 percent to 2.9
percent. In 1990 export share was to 3.3 percent to 3.6 percent in 1995.
2.6.2: LEADING PHARMACEUTICAL EXPORTING COUNTRIES:Table No.2.12 shows leading pharmaceutical export countries from
1980 onwards. Only eight countries 70 percent of the world pharmaceutical
exports. In 1999 world pharmaceutical exports was 79.8 percent. Germany,
Switzerland, USA and UK these countries are also among the top five
producers of pharmaceutical, only Japan missing from the major export group.
Table No.2.12 also indicates that the Germany contributed largest share
of world pharmaceutical exports in 1980 export of Germany was to US$ 2.272
billion and share of export in world market was 15.6 percent, which was
increased in 1990 it was US$ 5.8612 billion and share 16.3 percent. In 1999,
export was to 14.978 billion and share of export in world market was 14.5
percent. The export of Germany has increased more than 6 fold in 1999 over
1980.
Export of world market of Switzerland was to US$ 1.615 million
in 1980 and share of export in world market was 11.1 percent, which was
increased in 1999 it was US$ 11.452 billion and share of export of
Pharmaceutical 11.1 percent. The export of USA was to US $ 2.020 billion in
1980 to US$ 11.071 billion in 1999, the export of Switzerland and USA was
representing more than 7.09 fold and 5.48 fold in 1999 over 1980. However, it
is found the above table that the top exporting countries export state to increase
rapidly since 1980. However, it is found from the same table that export of
Italy had increased to US$ 0.688 billion in 1980 to US$ 5.607 billion in 1999
and share of export of Italy in world market was 4.7 percent in 1980 to 5.4
percent in 1999. The export of Italy was increased more than 8 fold in 1999
over 1980.
60
Chapter 2
TABLE NO: 2.12
TOP EXPORTING COUNTRIES 1980 TO 1999
(US$ Billion)
Country 1980
(in 1999
rank
order)
1990
1999
Increase
in 2007
over
1980
Val
ue
%
Value %
Ra Value %
wor
wor nk
wor
ld
ld
ld
Germany 2.27 15.6 5.861 16.3 1 14.97 14.5
2
2
8
Switzerl 1.61 11.1 4.359 12.1 2 11.45 11.1
and
5
USA
2.02
5
13.9
0
UK
1.73
1.49
11.9
0.67
10.3
0.68
4.040
3.665
4.6
1.632
11.07
7.09
10.7
1
11.2
4
10.05
5.48
9.7
3
10.2
5
2
0
Italy
3
4
7
Belgium
11.4
2
2
France
4.103
2
10.04
5.80
9.7
3
4.5
6
6.438
6.70
6.2
9
4.7
8
1.516
6.59
9.60
4.2
7
5.607
5.4
9
8.14
Ireland
-
-
-
-
8
5.122
4.9
Sweden
-
-
-
-
9
4.010
3.9
Netherla
0.61
4.3
1.377
3.8
10
3.852
3.7
nds
9
Top
Countrie
s
World
Export
11.1
13
76.5
26.55
4
73.7
82.62
6
79.8
14.5
26
100
36.03
7
100
103.6
19
100
1
-
6.22
Source: As of Table No. 2.10, Pn.23
61
7.43
7.13
Chapter 2
FIGURE NO:2.9
DISTRIBUTION OF TOP EXPORTING COUNTRIES 1980 AND 1999
IN %
Year 1980
Year 1999
10%
9%
7%
7%
9%
50%
7%
8%
51%
6%
7%
6%
3%
4%
3%
3%
0%
3%
0%
2%
3%
Germany
USA
France
Italy
Sweden
Top Countries Export
2%
Switzerland
UK
Belgium
Ireland
Netherlands
Table No.2.12 also reveals that the export of UK has also increased
tremendously. It was US$ 1.372 billion in 1980, which was increased to US
$10.053 billion in 1999. The export of UK has increased 5.8 fold in 1999 over
1980, the share of export of world market of UK was 11.9 percent in 1980, and
which was decreased 9.7 percent in 1999.
The export of France and Belgium in world market was to US$ 1.497
billion and US$ 0.670 billion in 1980, which rose to US$ 10.043 billion to US$
6.438 billion in 1999. However, share of export in world market it was less
from 1980 to 1999. It was 10.3 percent and 4.6 percent in 1980 to 9.7 percent
62
Chapter 2
and 6.2 percent in 1999. The export of France and Belgium was increased
more than 6.7 fold and 9.7 fold in 1999 over 1980.
From 1999, Ireland and Sweden were included in top exporting
countries. In 1999 export of Ireland in world market was US$ 5.122 billion and
Sweden was US$ 4.010 billion. Share of export 4.9 percent and 3.9 percent. In
1999 export of Netherlands was to US$ 3.852 billion and share of export was
3.9 percent it decreased compared to 1980s share of export. The export of
Netherlands has increased more than 6.22 fold in 1999 over 1980. In 1980 top
countries export was to US$ 11.113 billion, which increased to US $ 82.626 in
1999. Top countries share in 1980, which was 76.4 percent to 79.8 percent in
1999, and fold growth more than 7 fold.
The low income manufacturing countries produce predominantly for the
local market. Even in India, with over 20000 pharmaceutical manufacturers,
where the export share of local production has tripled since 1985 less than 20
percent of total production enters international trade.
Major pharmaceutical exports from low and middle-income countries in
1998 have been analyzed according to their destination, with the results shown
in Table No.2.13 China is the only country in this group to export most of its
pharmaceuticals to industrialized countries; all the other exporters supply
mainly developing country markets.
Table No 2.13 gives details about the pharmaceutical exports from low
and middle income countries. It is found above table that the export to
industrialized countries and exports to developing countries and export to
developing countries as percentage of total. China is the largest exports to
industrialized country as well as developing country in 1998 export of Chain to
industrialized country to US$ 1079 billion and export of Chain to developing
country to US$ 592 billion. India’s export to industrialized country as well as
developing country to US$ 288 billion to US$ 576 billion in same year.
63
Chapter 2
TABLE NO: 2.13
PHARMACEUTICAL EXPORT FROM LOW AND MIDDLE INCOME
COUNTRIES 1998
(Values in US$ Billion)
Exporter
Exports to
Exports to
Exports to
industrialized
developing
developing
countries
countries
countries as
% of total
China
1079
592
35.4
India
288
576
66.7
Mexico
304
410
57.4
Argentina
25
277
91.7
Korea
85
204
70.6
Brazil
64
183
74.1
Colombia
10
173
94.5
Source: Consumption and trade in off-patent medicines, Commission on Macroeconomics
and Health, Working Paper WG4:3, May 2001. http://www.cmhealth.org/cmh_papers
&reports.htm# Working Group 4.
Mexico, Argentina, Korea Republic, Brazil and Colombia all these
countries exports to developing countries higher than industrialized countries.
Mexico’s export to industrialized country as well as developing country to US
$304 billion to US $410 billion. Brazil and Colombia industrialized country
and developing country to US$ 64 billion to US$ 183 billion and US$ 10
billion to US$173 billion in the same year.
64
Chapter 2
FIGURE NO: 2.10
TRNDS OF PHARMACEUTICAL EXPORT FROM LOW AND
MIDDLE INCOME COUNTRIES 1998
(Dollar figures in US $ Billion)
1200
Values in US $ Billion
1000
800
600
400
0
Exports to
industrialized
countries
Ch
in
a
In
di
M a
ex
A ico
rg
en
tin
K a
or
ea
Br
Co azi
lo l
m
bi
a
200
Exports to developing
countries
Countries
2.6.3: PHARMACEUTICALS IMPORT PATTERN:Table No.2.14 that the shows the shares of countries, by income level, in
world pharmaceutical imports from 1980 to 1999. The share of high-income
countries rose from 69.9 percent of total imports to 79.3 percent. The shares of
both low and middle income countries fell over the same period from a
combined 30.1 percent of the world market to 20.7 percent. As with exports,
trade became increasingly concentrated among the high-income countries in
these two decades.
The share of high income countries rose from 72.4 percent of total
imports to 79.2 percent from 1985 to 1990. Following table shows value of
65
Chapter 2
TABLE NO: 2.14
SHARE OF LOW, MIDDLE AND HIGH INCOME COUNTRIES IN
WORLD PHARMACEUTICAL IMPORTS
(In %)
Year
1980
1985
1990
1995
1999
Low Income
7.2
7.5
6.1
5.2
3.4
Middle Income
22.9
20.1
14.7
16.7
17.3
High Income
69.9
72.4
79.2
78.2
79.3
Source: World Health Organisation Report 2004, The World Medicines Situations,
Commodity Trade Statistics Section, ITSB, United Nation Statistic Division, New York, US
pharmaceutical price index, P.No.25
FIGURE NO: 2.11
DISRIBUTION OF SHARE OF LOW, MIDDLE AND HIGH INCOME
COUNTRIES IN WORLD PHARMACEUTICAL IMPORTS IN %
Year 1999
Year 1980
3%
7%
17%
23%
70%
Low
Income
Middle
Income
High
Income
66
80%
Chapter 2
pharmaceutical imports, conforming relatively weak growth of middle income
country as well as low income country imports.
2.6.4: LEADING PHARMACEUTICAL IMPORTING COUNTRIES:Table No.2.15 identifies the principal importing countries, which
include the five principal producers. The combined imports of these 11
industrialized countries accounted for 54 percent of world imports in 1980 and
66 percent in 1999. Germany was the world’s leading importer in 1980 and
1990. Japan’s position as an importer has fallen since 1990.
Table No.2.15 shows leading pharmaceutical importing countries from
1980 to 1999. Imports of USA were to US$ 803.1 billion in 1980, which
increased to US$ 13649 billion in 1999. The share of import of USA in world
market was 5.9 percent in 1980 to 13 percent in 1999. A USA import has
increased more than 16.99 fold in 1999 over 1980. However, it is found from
following table that the import of USA state started to increase rapidly since
1980. In 1980, Imports of Germany were to US$ 1291 billion in 1980, which
increased to US$ 8669.6 billion in 1999. The share of import of Germany in
world market was 9.5 percent in 1980 but they showed decreased growth of 8.3
percent in 1999. It was decreased compared to earlier period. An import has
increased by 6.71 fold in 1999 over 1980.
In 1980, an import of France was to US $700.8 billion, which increased
to US$ 7748.7 billion in 1999. It indicates an import was increasingly
tremendously. The share of import of France in world market was 5.2 percent
in 1980 to 7.4 percent in 1999. A France import has increased by11.05 fold in
1999 over 1980. In 1980, imports of UK were less compared to Italy and
France it was to US$ 516.9 billion in 1980, which rose to US$ 7746.6 billion in
1999. The share of import of UK in world market was 3.8 percent in 1980 to
7.4 percent in 1999. A UK import has increased more than 14.98 fold in 1999
over the year 1980.
67
Chapter 2
TABLE NO: 2.15
TOP IMPORTING COUNTRIES 1980 TO 1999
(Values in US$ Billion)
Countr 1980
y
(in
1999
rank
order)
Valu
e
USA
1990
1999
%
Valu
worl e
d
803.1 5.9
2540
%
Ra Valu
worl nk e
d
7.3
1
1364
9
9.8
2
8669.
6
7.6
3
7748.
7
6.0
4
7746.
7
8.1
5
6195.
8
3.4
6
5050.
5
4.4
7
5023.
6
8.2
8
4593.
4
4.2
9
4174.
6
2.8
10 3509.
0
2.5
11 3237.
6
64.3
6959
9
German 1291. 9.5
y
0
France 700.8 5.2
3396
UK
516.9 3.8
2064
Italy
652.6 4.8
2817
Switzer
land
Belgiu
m
Japan
Netherl
ands
Spain
411.0 3.0
654.9 4.8
2646
1193
1510
1074. 7.9
2
568.9 4.2
2836
245.2 1.8
975.
7
860.
3
2228
6
Canada
356.2 2.6
11 top
pharm.
importi
ng
countrie
s
World
importe
rs
7274. 53.5
8
1447
Incre
ase in
2007
over
1980
%
worl
d
13.0
16.99
8.3
6.71
7.4
11.05
7.4
14.98
5.9
9.49
4.8
12.28
4.8
7.67
4.4
4.27
4.0
7.33
3.3
14.31
3.1
9.08
66.4
9.56
1354
3.2
Source: As of Table
100
3463
6
100
1048
01
100
7.73
No. 2.14, Pn.26
68
Chapter 2
FIGURE NO: 2.12
DISTRIBUTION OF TOP IMPORTING COUNTRIES 1980 AND 1999
IN %
Year 1999
Year 1980
4%
6%
3%
8%
2%
5%
3%
4%
2%
4%
3%
4%
5%
3%
3%
3%
1%
3%
2%
66%
2%
60%
2%
2%
USA
Germany
France
UK
Italy
Switzerland
Belgium
Japan
Netherlands
Spain
Canada
World importers
Table No.2.15 also shows that the imports of Italy and Switzerland,
imports of these two countries was to US$652.6 billion and US$ 411 billion in
1980, which increased to US$ 6195.8 billion and US$ 5050.5 billion in 1999.
69
Chapter 2
These countries share in 1980 was 4.8 percent of Italy and 3.0 percent of
Switzerland and in 1999 it was 5.9 percent and 4.8 percent. The imports of
Italy and Switzerland increased more than 9.49 fold and 12.48 fold in 1999
over 1980. In 1980, an import of Belgium was to US$ 654.9 billion, which
increased to US$ 5023.6 billion in 1999. The share of import of Belgium in
world market was 4.8 percent in 1980 to 74.8 percent in 1999. A Belgium
import has increased by 7.67 fold in 1999 over 1980.
Netherlands, Spain and Canada’s share of imports in world imports it
was less means not more than 4.0 percent in world imports. In 1980 top 11
countries imports was to US$ 7274.8 billion, which increased to US $ 69599
billion in 1999. Top11 countries share in 1980, which was 53.5 percent to 66.4
percent in 1999, and fold growth more than 9.56 fold. Total world import was
to US$ 13543.2 billion in 1980, which raised to US$ 104801billion in 1999 and
fold growth more than 7 fold in 1999 over 1980.
Table No. 2.16 shows that the pharmaceutical imports from other lowor middle-income countries account form a minority share in each of these
countries. Brazil is the largest imports to other low and Middle-income
TABLE NO: 2.16
PHARMACEUTICAL IMPORTS FROM LOW AND MIDDLE INCOME
COUNTRIES: 1998
(Values in US$ Billion)
Exporter
Exports to
industrialized
countries
Exports to
developing
countries
Brazil
Mexico
Argentina
Korea
China
Colombia
1325
955
638
463
423
294
263
109
139
92
103
202
Exports to
developing
countries as
% of total
16.6
10.2
17.9
16.6
19.6
40.7
Source: Consumption and trade in off-patent medicines, Commission on Macroeconomics
and Health, Working Paper WG4:3, May 2001. http://www.cmhealth.org/cmh_papers
&reports.htm# Working Group 4.
70
Chapter 2
FIGURE NO: 2.13
TRENDS OF PHARMACEUTICAL IMPORTS FROM LOW AND MIDDLE
INCOME COUNTRIES: 1998
(Values in US$ Billion)
1400
Values in US $ Billion
1200
1000
800
600
400
200
0
Brazil
Mexico
Argentina
Korea
China
Colombia
Countries
Exports to industrialized countries
Exports to developing countries
countries account for a minority share in each of these countries. Brazil is the
largest imports to industrialized country as well as developing country in 1998
import of Brazil from industrialized country to US$ 1325 billion and import of
Brazil to developing country to US$ 263 billion.
Mexico, Argentina, Korea Republic, China and Colombia all these
countries imports to developing countries higher than industrialized countries.
Mexico’s import from industrialized country as well as developing country to
US$ 955 billion to US$ 109 billion. Argentina and Colombia industrialized
country and developing country to US$ 638 billion to US$139 billion and US
$294 billion to US$ 202 billion in the same year.
71
Chapter 2
2.7: MAJOR PLAYERS OF THE WORLD PHARMACEUTICAL
MARKET:U.S. companies play a key role in the world pharmaceutical industry 8
out of 15 leaders of this market are headquartered in the United States;
moreover, the largest world pharmaceutical company, NJ-based Pfizer, has
sales of pharmaceutical products that are approximately 1.5 times higher than
those of its closest competitor. The pharmaceutical industry is characterized by
a high level of concentration with fifteen multinational companies dominating
the Industry. Several factors are worth mentioning. First, for almost all
companies presented in the table, the pharmaceutical segment is the largest;
and only for one of them, world giant Johnson and Johnson, sales of
pharmaceutical segment are below 50 percent.
Table No. 2.17 contains information about these major pharmaceutical
companies that are sorted in the order of their 2004 revenues from the sales of
pharmaceutical products. Numbers provided in this table include sales of all
subsidiaries and affiliated companies that are consolidated in annual reports of
the corresponding companies.
As Table No. 2.17 shows, the majority of the largest pharmaceutical
companies are not diversified. They are either concentrated exclusively on
pharmaceutical products, (Eli Lilly and Astra Zeneca are good examples with
virtually 100 percent of their revenues coming from sales of pharmaceutical
products) or, although they develop and manufacture other health care
products, they still have pharmaceutical divisions as the core of their business
that provide more than 50 percent of their revenues. Other products
manufactured by these companies usually include medical devices, nutritional
products, consumer healthcare products and products for animal health.
Only two out of these 15 major pharmaceutical companies have revenues from
sales of pharmaceutical products that are lower than 50 percent of their total
sales. These companies are world giants Johnson and Johnson (which besides
pharmaceutical products manufactures consumer goods and medicaldevices)
72
Chapter 2
TABLE NO: 2.17
REVENUE AND SALES OF MAJOR PHARMACEUTICAL
COMPANIES
(Values in US Million)
Company
HQ, location
Revenue
of Total
Share of
pharmaceutical
sales, mln pharmac
segment, mln USD USD
eutical
segment,
%
Pfizer
NY, U.S.
46,133
52,516
87.85%
GlaxoSmithKline
UK
31,434
37,324
84.22%
Johnson
NJ, U.S.
22,190
47,348
46.87%
Merck
NJ, U.S.
21,494
22,939
93.70%
AstraZeneca
UK
21,426
21,426
100%
Johnson&
Switzerlan
Novartis
d
18,497
28,247
65.48%
Sanofi-Aventis
France
17,861
18,711
95.46%
Roche
Switzerlan
17,460
25,168
69.37%
Bristol-Myers
Squibb
Wyeth
NY, U.S.
NJ, U.S.
15,482
13,964
19,380
17,358
79.89%
80.45%
Abbott
IL, U.S.
13,600
19,680
69.11%
Eli Lilly
IN, U.S.
13,059
13,858
94.23%
Takeda
Japan
8,648
10,046
86.09%
Schering-Plough
Bayer
NJ, U.S.
Germany
6,417
5,458
8,272
37,013
77.57%
14.75%
Source: Larry Davidson and Gennadiy Greblov, (2005) “The Pharmaceutical industry in the
Global Economy”. Information Services via the World Trade Atlas, U.S. State Export
Edition,www.bus.indiana.edu/davidso/lifesciences/lsresearchpapers/pharmaceutical%20ind
ustryaug12.doc
and Bayer, which has only about 15 percent of its revenues from the sales of
pharmaceutical products.
73
Chapter 2
Eli Lilly’s US$ 13.1 billion sales figure made it the twelfth largest
company – with Pharmaceutical sales considerably larger than Bayer’s US$ 5.5
billion but a lot less than Pfizer’s US$ 46.1 billion.
Geographical headquarters of major pharmaceutical companies are
approximately evenly distributed between the U.S. In addition, Western Europe
with only one Asian company in the list. Indiana is home to one of these
companies, Eli Lilly.
2.8: MERGER AND ACQUISITION OF WORLD PHARMACEUTICAL
COMPANIES:
The pharmaceutical industry is currently undergoing a period of very
significant transformation. The majority of big Pharmaceutical companies
generate high returns, thus providing them with excess cash for further rapid
growth whether organic or through mergers and acquisitions. Although size of
the company on its own does not guarantee success, it gives a significant
advantage, especially in pharmaceutical industry. Besides economies of scale
in manufacturing, clinical trials and marketing, bigger companies can allow
investments in more research and development (R&D) projects that diversify
their future drugs portfolio and make them much more stable in the long term.
As the result, top companies in the industry were active participants of mergers
and acquisitions, new joint ventures and spin-offs of non-core businesses.
The largest acquisitions in the industry during last years were
the acquisition of Pharmacia by Pfizer (purchase price US$58 billion), and
acquisition of Guidant by Johnson and Johnson (purchase price $25 billion).
Both acquisitions allowed these two U.S.-based companies to solidify their
places among the elite of the pharmaceutical industry. European companies
were even more aggressive in merger and acquisitions activity than their
American competitors were 3 out of 6 major European companies underwent
mergers during the last severalyears: GlaxoSmithKline (merger of Glaxo
74
Chapter 2
TABLE NO: 2.18
MERGER AND ACQUISITIONS OF THE TOP PHARMACEUTICAL
COMPANIES
(Values in US Billion)
Company
acquired
Pfizer
Johnson &
Johnson
Merck
Bristol-Myers
Squibb
Eli Lilly
Abbott
Core business of targets
Prescription
pharmaceutical products,
Pharmacia
consumer healthcare
products and animal
healthcare products
Biopharmaceutical
Esperion
company with no
Therapeutics
approved products
Treatment of cardiac and
Guidant
vascular disease
Non-prescription
Consumer
pharmaceutical products
Pharmaceuticals
(former JV of J&J and
Merck)
R and D in synthesis of
DNA sequences, gene
Egea
assembly and
Biosciences
construction of large
synthetic gene libraries
Biapharm SAS
Skin care products
Micomed
Spinal implants
Development of novel
Aton Pharma
treatments for cancer and
other diseases
R and D, manufacturing
Banyu
and sales of drugs for
Pharmaceutical
cardiovascular diseases
and antibiotics
Materials for Wound
Acordis
Therapies products
Applied
Treatment of nonMolecular
Hodgkin's lymphoma and
Evolution
rheumatoid arthritis
Advanced diabetes
TheraSense
management technology
i-Stat
Diagnostic testing
Spine Next SA
Spine-care business
75
Purchase
price
US billion
$56.0
$1.3
$25.4
$0.6
$0.1
$1.5
$0.2
$0.4
$2.3
Chapter 2
GlaxoSmithKline
Merger of
Glaxo
Wellcome and
SmithKline
Megrer of two major
pharmaceutical
companies (registered in
2000)
Beecham
Block Drug
AstraZeneca
-
Oral care and over-thecounter medicines
Megrer of two major
Merger of Astra
pharmaceutical
and Zeneca
companies (registered in
843 mln
GBP
-
1999)
Novartis
Generic manufacturer
Sabex
with a leading position in
generic injectables
Mead Johnson's
adult nutrition
385 mln
nutrition
USD
Idenix
Pharmaceuticals
Inc
Igen
International
Disetronic
Sanofi-Aventis
Bayer
Merger of
SanofiSynthelabo and
Aventis
Roche's overthe-counter
business
USD
Global adult medical
business
Roche
565 mln
Biotechnology
Human in-vitro
diagnostics
Insulin pumps and
injection systems for the
treatment of diabetes.
Merger of two major
pharmaceutical
companies (registered in
2004)
Gustafson
76
255 mln
USD + up
to 357 mln
USD in
possible
additional
payments
1,823 mln
CHF
1,132 mln
CHF
-
Over-the-counter
medicines
206 mln
EUR
Seed treatment
100 mln
EUR
Chapter 2
Source: as of Table No: 2.17
Wellcome and SmithKline Beecham), AstraZeneca (merger of Astra and
Zeneca) and Sanofi-Aventis (merger of Sanofi-Synthelabo and Aventis).
Another form of structural change in the industry was establishing of
new strategic alliances and joint ventures. So far as the research and
development process for each drug take many years and requires significant
investments, and the outcome of these investments of time and financial
resources remains unclear until the final approval of the drug, big
Pharmaceutical companies are constantly looking for synergies that they can
get from cooperation with their competitors. Last few years give multiple
examples of such initiatives. For example cooperation of Sanofi-Aventis and
Bristol-Myers Squibb resulted in production of Plavix, which is currently one
of the top-selling products for each of these companies.
Finally, big Pharmaceutical companies in order to maintain strong sales
growth and to meet profitability expectations of their shareholders were
actively selling low-profitability or non-core businesses. For example, in 2003
Merck sold its low-profitability Medco Health Solutions that helped to increase
its profitability margin. Massive sales of non-pharmaceutical businesses by
Takeda also were compatible with its strategy to concentrate its financial
resources on its core pharmaceutical business.
2.10: CONCLUSIONS:At present leading global pharmaceutical players in world market in
terms of sales, production, import and export and research and development
expenditure. USA, Europe and Japan are the largest pharmaceutical market,
approximately share of United State 33 percent of the total world market.
During the study period developed countries pharmaceutical production shares
increased from 89.1 percent in 1985 and 92.9 percent in 1999. Global
pharmaceutical production located in five developed countries the USA, Japan,
Europe, UK and Germany.
77
Chapter 2
The global pharmaceutical sale has increased during the period under
study. The global pharmaceutical sales was only US$ 289 billion in 1997
which increased to US$ 712 billion in 2007 representing more than 2.46 fold
over the period and compound growth rate is 10.07 during the study period.
The majority of global pharmaceutical sales originate in the USA, Europe and
Japan accounting for 80 percent of market. The North America has been by far
the largest pharmaceutical market by volume and value means US$ 304.5
billion in 2007 half of global sales, with the strongest growth among key
markets, contributing 51 percentage global market growths in 2002, the US
accounted for a 45.9 percentage of blockbuster sales compared with only 8.8
percentages from Japan and 31.1 percentages from Europe. . The sale of North
America has increased 1.99 fold in 2007 over 2000. The Compound rate was
10.03 percent during the period under study but compared to EU countries it
has decreased. The sale of European Countries has increased 2.73 fold in 2007
over 2000. Its Compound rates was16.43 percent during the period under study.
The sale of Asia (excluding Japan), Africa & Australia shows increasing trends
during the period under the study. The sale of Asia (excluding Japan), Africa &
Australia has increased 3.32 fold in 2007 over 2000. compound growth rate of
sales of this region was 16.38 percent during the period under study.
Table No. 2.5 indicates sales by geographic area of PhRMA member
companies, the share of world pharmaceutical sales in developing countries at
this point of time is much lower, India’s and Pakistan sales is very low it is to
US$ 628.3 million. Share of world pharmaceutical sales only 0.3 percent.
Internal and external sales of USA and PhRMA member companies shown
continuous increasing trend since the study period. Sales of USA to states
increased to 3.94 fold in 2006 over 1991. Compound growth rate of sales of
USA is 10.98 percent during the period under study. Sales of PhRMA member
companies to states increased to 3.19 fold in 2006 over 1991. Compound
Growth Rate of sales of USA is 8.17 percent during the period under study.
Global pharmaceutical industry is highly Research and development
intensive. US alone account for about 77.7 percent of world Research and
78
Chapter 2
development expenditure. At the same time, although the share of world
pharmaceutical research and development expenditure in developing countries
at this point of time is much lower, India’s and Pakistan research and
development expenditure is very low means it is to US$ 10.9 million. Share in
world pharmaceutical research and development expenditure only 0 percent.
They show negative growth rate than developed countries do.
Developed countries are dominating in international trade because of
high income countries trade increased from 1980 to 1999 share of these
countries to increased 90.5 percent to 92.9 percent during the study period.
They are interested in Asian market because of wide area and population. In
1999 total world export was to US$ 103.19 billion. The low income
manufacturing countries produce predominantly for the local market. Even in
India, with over 20000 pharmaceutical manufacturers, where the export share
of local production has tripled since 1985 less than 20 percent of total
production enters international trade.
The pharmaceutical industry is changing fast. To survive and to prosper
involves managing drug pipelines as drugs come off patents they no longer
bring in enough revenues and must be replaced quickly by other drugs with
durable patents. This means that the companies have to think ahead, something
that sounds easy but involves great risks. Huge sums must be invested in
uncertain in-house research and development and/or must go toward mergers
and acquisitions with other promising companies. Strategic alliances can be
used to augment opportunities as well.
As companies develop their new pipelines, they must be mindful of
changes caused by regulations and deregulations in countries all over the globe.
While most of drug consumption and sales is a U.S.,European, Japanese affair
deregulation means sales opportunities are growing rapidly in the developing
world. China, Thailand, Egypt, Mexico, Argentina, Brazil, and Venezuela have
been increasing their imports of pharmaceuticals products at rapid rates. Of
course, where there is growing demand there is also growing supply and
competition. Many new drug companies are springing up in developing
79
Chapter 2
countries and the biggest global firms are moving into those territories.
However, even this has more than the usual global risk for drug companies
because of the importance of intellectual property protection. Picking places
and partners takes more than the usual scrutiny or a company can lose valuable
resources. Speaking of places we noted that the U.S. is the largest market for
pharmaceutical sales and therefore will continue to be a hotbed of competition
for Lilly and the other U.S. producers. Non U.S. companies have been very
active in mergers and acquisitions and will be more formidable competitors on
U.S. soil.
This
global
competitive
environment
creates
challenges
and
opportunities for the companies with equal importance for the communities in
which they reside. If size matters in the drug industry then both domestic and
foreign mergers, acquisitions, and strategic alliances will continue to be
critical. Such changes always have implication for location requiring
communities around the globe to think harder about their roles as globalization
unfolds. Communities that desire to maintain or build pharmaceutical clusters
must be mindful that investment is always a two-way street. Building strong
and growing pharmaceutical clusters at home will entail both inbound and
outbound investments since whatever companies locate or stay in their areas
they will be compelled by global competition to own production facilities
abroad.
This research offers no new insights into what it takes to build a viable
pharmaceutical cluster but it surely underlines two facts that it is worth doing
in Indiana and that it will involve retaining and attracting companies that need
to take sizeable financial risks. This suggests an infrastructure that supports not
only the usual needs for top-flight talent and communications/transportation
advantages but it suggests an environment that allows for flexibility and risk
taking. While clusters bring to mind new facilities and higher employment,
global competition suggests that drug companies will survive and prosper
sometimes by shedding unprofitable lines of business. It is always painful for
any community when firms restructure. It is tempting to regulate firms so that
80
Chapter 2
the blows to the community are softer. However, the truth of the drug industry
is that competitiveness and growth will require many actions on the parts of
these firms and not all of them will seem to be in the best short-run interest of
the community.17
81
Chapter 2
References:1 - PhRMA Industry Profile, 1998, p. 70
2 - Drugs and Pharmaceuticals: International Pharmaceutical Industry-A
Snapshot, Jan 2004, ICRA
3– Ibid
4 – Ibid
5 – Ibid
6 – Ibid
7 – Ibid
8 – Ibid
9 – Ibid
10 – Ibid
11 – Ibid
12 - Ibid
13 - Pharmaceuticals: The Indian Pharmaceutical Industry, Feb 2005, ICRA
(Indian Credit Rating Agency)
14 - World Health Organasation Report 2004
15 - European Federation of Pharmaceutical Industries and Association
(EFPIA)
16 - PhRMA 2004 Pharmaceutical Industry Profile
17 - Larry Davidson and Gennadiy Greblov, (2005) “The Pharmaceutical
industry in the Global Economy”. Information Services via the World Trade
Atlas, U.S. State Export Edition, pn.29-30
82
Chapter 2
83