Tipping the Scales in Manufacturing Investment

Pharmaceutical Technology's Third Annual Manufacturers' Rankings reveal several important trends reflected by the pharmaceutical industry's sales growth, manufacturing activity, and acquisitions in 2007 and 2008. Big Pharma continues to invest heavily in biologics by expanding production capacity and acquiring technology platforms. Companies are strengthening their pipelines through acquisitions of both biologics and select small-molecule drug candidates. Also, several major pharmaceutical companies are restructuring to reduce costs across their supply chains.

The impetus behind this activity is clear: the rate of growth in the pharmaceutical industry continues to slow. The global pharmaceutical market increased 6.4% (as measured in constant US dollars) to $712 billion in 2007, according to IMS Health. This growth rate was down from the 7.1% rate achieved in 2006, when the global market reached $649 billion. Last year also marked the fourth consecutive year of single-digit revenue growth (see Table I). The North American market, which accounted for 45.9% of the global market in 2007, increased only 4.2% to $304.5 billion, and the European market increased 6.7% to $206.2 billion, according to IMS Health. Growth in emerging markets was robust, although these gains were from a small base (see story, "A Reality Check on Emerging Markets").