By Emily Wasserman
Big Pharma has some serious ground to cover when it comes to global sales and marketing. Worldwide spending for prescription branded drugs and generic medicines is set to increase 30% from 2013-2018 with $1.3 trillion in annual global drug sales on the line, according to data from the Institute of Healthcare Informatics cited by The Motley Fool blog. And drugmakers should look at markets around the world for their cut of the revenues.
Pharma investor Cheryl Swanson took a look at the top 5 pharma markets by 2013 sales and found while the U.S. ruled the roost when it came to pharma sales, generating in $339.7 billion in 2013 and grabbing the top spot on the list, price hikes for generics and payer pushback could put a damper on things in the future–and open the door for competition in emerging markets such as China. Japan, which snagged the No. 2 spot on the list, brought in $94 billion in global pharma sales with help from an aging population and speedy regulatory reviews for new products.
China grabbed the No. 3 slot behind Japan, hauling in $86.8 billion in pharma sales. The numbers don’t exactly come as a surprise, as China accounts for almost a quarter of the world’s population and is set to generate 34% of the global growth in medication spending over the next 5 years, according to the blog post. China’s burgeoning diabetes sector is attracting the attention of industry heavyweights such as Johnson & Johnson ($JNJ) and Merck ($MRK). And AbbVie ($ABBV), Roche ($RHHBY) and Sanofi ($SNY) all have plans to build facilities in the country.
Rounding out the list are Germany and France, with Germany generating $45.8 billion in sales and France roping in $37.2 billion in sales. The countries buck the overarching trend, as pharma sales in Europe continue to drop off. Germany’s market faced some slowdown after the country passed a law requiring drugmakers to prove the added benefits of their new products if they want to command premium pricing, dealing a blow to companies such as Eisai, which pulled its Fycompa from the market after Germany shot it down. But the German drug sector is still expected to grow 1.7% from 2015 to 2020, according to information from consulting firm GlobalData cited by the blog.
And even though France’s pharma market only boasts a growth rate of 1% from 2012 to 2013, its track record of physician prescriptions could still provide lucrative opportunity for drugmakers. More than 90% of doctor visits in the country end in prescriptions, the blog notes, and a preference for brand name drugs could continue to buoy numbers.