Global pharmaceutical industry trends

We present to your attention a publication from a series of analytical reviews of the Single Distributor of "SK-Pharmacy" LLP within the framework of the National Project "Health of the Nation".

Global pharmaceuticals occupy an important place in the global economy, characterized not only by the complex structure and specificity of innovative processes, but also by high investment attractiveness and a fairly large number of jobs employed both in the production and in the development of new molecules. It should be noted that the pharmaceutical industry remains a key factor in the development of the economy of many European countries and is one of the most knowledge-intensive sectors of the economy, which is associated with high-tech production processes. It is necessary to note the scale of investment in scientific research, where more than 30 new molecules enter the global market every year (Figure 1).

In the context of innovation opportunities and competitiveness, the export potential of countries is often considered, more specifically, their high-tech exports. The strategic development of the pharmaceutical industry is influenced by demographic and epidemiological trends: characteristic diseases determine the focus of research and development and the direction of global investment activity in the industry. In this process, the dominant role is played by BigPharma companies, which include the innovation processes and invest huge amounts of money in the development of innovative molecules.

At the same time, while remaining a socially significant sphere, the pharmaceutical industry is very dependent on regulatory decisions and the effectiveness of the management of research processes. Thus, the coronavirus pandemic exposed the extreme vulnerability of the world community to such challenges and pointed to the need for the development of the pharmaceutical industry as a guarantor of drug safety.

According to the results of 2020, the global pharmaceutical market can be attributed to the only markets that are actively developing and showing active growth in the situation with the pandemic. Even before the Covid-19 pandemic, there were issues such as price pressures, results orientation, complex drug portfolios, and a tough regulatory environment. However, with challenges come changes and opportunities, and the pharmaceutical industry adapts flexibly, looking to the future.


Figure 1. Analysis of global pharmaceutical industry trends

According to the leading experts of "Fortune Business Insights", the value of the global pharmaceutical industry in 2020 was 1.12 trillion US dollars, and by 2023 it will reach 1.57 trillion US dollars. There is a positive trend of an average annual growth rate of 6%, in particular, due to an increase in the production of antitumor, antidiabetic and anti-rheumatic drugs by 12% per year.

The impact of pharmaceutical sector revenues and profits on GDP is growing. Total sales at the end of 2019 amounted to more than 2 trillion US dollars – about 1.4% of global GDP. Global sales of exported medicines to 116 countries cost US $ 392.9 billion. At the same time, the employment of the population in the pharmaceutical industry amounted to 4.4 million people – 0.1% of the working-age population of the planet.

It is necessary to note the scale of investment in scientific research, which exceeds 150 billion US dollars, with 20% of the market revenue coming from the development of R&D centers, as a result of which more than 30 new molecules enter the global market every year.

According to the international analytical company "IQVIA", the Top 10 countries account for 79.5% of the total value of the global pharmaceutical market, where by the end of 2019 the rating is headed by the United States with a market volume of 501.2 billion US dollars (Figure 2).


Figure 2. Top 10 Pharmaceutical markets, 2019

According to authoritative sources on the study of the pharmaceutical market, such as "PharmaBoardroom" and "Evaluate Ltd.", sales of the Top 10 companies "BigPharma" occupy 35% of the value of the global pharmaceutical market.

As the overall figures for annual prescription drug revenue and R&D spending show, it is the ability of these companies, collectively, to generate results and support investment that ultimately helps turn new scientific and promising innovations into approved therapies. In fact, leading pharmaceutical companies re-invest up to 20.8% of their drug sales in the development of new drugs (Figure 3).


Figure 3. Top 10 pharmaceutical companies, 2020

It should also be noted that active state support for the pharmaceutical industry has allowed a number of developing countries, especially India and China, not only to protect domestic markets, but also to successfully enter foreign ones. The share of own manufacturers in the pharmaceutical market of China is 70%, India - 80%. The state actively contributed to the growing role of these countries in the world market. Thus, the share of Indian and Chinese companies in the global pharmaceutical market increased from 6.5% to 9.4% from 2007 to 2019.

The most dynamically developing markets in recent years have been China and South Korea (Figure 4). The emphasis on the centralization of production and quality of medicines (GMP) in China made it possible to ensure the development of 800 innovative molecules, attract 20 global manufacturers and fully switch to international standards for the circulation of pharmaceutical products.
South Korea has followed the path of innovative development in the field of promising areas of science, localization of the production of biosimilars, attracting public and private capital, and has mobilized the best international specialists to the country.


Figure 4. Dynamically developing markets of recent years

Over the years of implementing the pharmaceutical and medical industry Development program, Russia has established the production of 7 independently developed innovative molecules, created 8.5 thousand high-performance jobs, and the share of Russian-made medicines in the total volume of consumption reached 29.5%.

Uzbekistan has approved the Concept for the Development of the Pharmaceutical Industry until 2024, which sets the tasks of organizing the production of medicinal substances based on the in-depth processing of plant raw materials and attracting foreign investment and best foreign practices in the production of pharmaceutical products (Figure 5).


Figure 5. Dynamically developing markets of recent years

The main factors of the positive dynamics of the market in 2020 were a sharp increase in demand for medicines, an increase in their cost and the emergence of new drugs. Due to the coronavirus pandemic, many new drugs appeared on the market that helped in the prevention and control of the consequences of the coronavirus. In normal times, new drugs take a long time to appear on the market, but in the context of the pandemic, the time frame has been significantly reduced, which has affected the cost of medicines.

Thus, the global pharmaceutical market trends in the context of the coronavirus pandemic are an integral part of the modern pharmaceutical industry and force local regulators to improve the pricing and patenting system, as well as to force the entry of new drugs into local markets. At the same time, pharmaceutical companies should review their market models and approach to innovation. The future development of the industry will depend on the innovative achievements in the pharmaceutical industry and the reaction of the leading BigPharma companies to the ongoing changes.




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