Global pharmaceutical industry - statistics & facts
The pharmaceutical industry is responsible for the research, development, production, and distribution of medications. The market has experienced significant growth during the past two decades, and pharma revenues worldwide totaled 1.48 trillion U.S. dollars in 2022.
Top pharmaceutical companies
The pharma industry is comprised of some major multinational companies. Based on prescription drug sales, U.S. company Pfizer has been among the world’s leading pharmaceutical companies for many years. The company, which has its global headquarters in New York City, generated total revenues of more than 100 billion U.S. dollars in 2022. However, back in 2020, the company saw a heavy drop in revenues after the spin-off of its Upjohn generics business. Other top global players from the United States include Johnson & Johnson, Merck & Co., and AbbVie.
Pharma industry by country
Many of the leading pharma companies come from the United States, and, therefore, it is no surprise that the country has the largest national pharmaceutical market worldwide. China has become one of the main players in the industry, although currently fighting with receding growth rates as in many other sectors. Among emerging markets, the pharmaceutical annual growth rate was very strong in Brazil during 2022. However, projected pharmaceutical sales show that the established markets of North America and Europe will still be leading the way in the foreseeable future. Some of the biggest European companies are Novartis, Roche, AstraZeneca, and Sanofi.
How much do companies spend on R&D?
More than any other industry, the pharmaceutical sector is highly dependent on research and development, with companies investing around 20 percent or more of their sales revenues in R&D projects. This share can be much higher at companies that specialize in research and generate low sales. The discovery of new drugs is vital for the continued growth of pharma companies, and sales of new branded drugs can provide sizeable contributions to total revenues. However, the loss of patent protection can have serious consequences, and competition from generic drugs is a major challenge for companies. The expiration of a product patent can result in a significant reduction in revenues, as experienced by Pfizer’s Lipitor from 2012 onwards.
All eyes on pharma and biotech
Soon after the COVID-19 pandemic hit the world with full force, it became clear that without new therapies and particularly vaccines the world would be stuck in a permanent cycle of lockdowns and crises. Consequently, pharmaceutical companies came into the public’s focus, with the pressure to provide results quickly growing. This was especially true for the global leaders of the vaccine market – GSK, Pfizer, Merck & Co., and Sanofi. However, out of these four, only Pfizer managed to develop a widely-used, safe, and effective COVID-19 vaccine, in cooperation with German biotech company BioNTech, which originally discovered this vaccine. AstraZeneca, previously not a company focused on vaccines, developed a vaccine together with the Oxford University.
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