Global pharmaceutical industry
is facing an unprecedented crisis in terms of sales growth, profitability and discovery
of new drugs for the last some years now. With increasing rate of patent expiry
of several blockbusters and reduced spending on research, top multinational
drug companies are facing a rather gloomy future in the years to come. The
Pharmabiz study of financial performances of 15 top international
pharmaceutical companies during 2013 has revealed this prospects somewhat
clearly.
The study shows that net sales
of these 15 companies from the pharmaceutical segment including vaccines and
generics during 2013, remained flat at $431 billion as against $430 billion
reported in the previous year.
The operating profit of 15 companies increased only by 2.1 per cent to $122.4 billion from $119.9 billion in the previous year. During 2013, Swiss based Novartis International AG has emerged as the top company in pharmaceutical sales with $53.85 billion as compared to its sales of $52.93 billion in the previous year registering a growth of 1.7 per cent.
The operating profit of 15 companies increased only by 2.1 per cent to $122.4 billion from $119.9 billion in the previous year. During 2013, Swiss based Novartis International AG has emerged as the top company in pharmaceutical sales with $53.85 billion as compared to its sales of $52.93 billion in the previous year registering a growth of 1.7 per cent.
Pfizer remained at the second position with a
6.5 per cent decline in pharmaceuticals sales at $47.87 billion from $51.21
billion in the previous year. Roche climbed to third spot in pharmaceutical
sales among the 15 companies from fourth position in the previous year. Its
pharmaceuticals sales grew by 5.8 per cent to $40.76 billion from $38.55
billion. Merck & Co went down to fourth place as its sales declined by 7.8
per cent to $37,437 million from $40,601 million. The sales performances of
Pfizer and Novartis during the last four years is quite glaring. In 2010, Pfizer
was top among international companies with a pharmaceutical sales of over $58
billion and Novartis in the same year had a sales of just $30 billion. Pfizer’s
sales then declined to $57 billion in 2011, to $51 billion in 2012 and finally
to $47 billion in 2013. During the same period, pharmaceutical sales of
Novartis moved up to $53.85 billion in 2013 from $30 billion in 2010. Pfizer’s
pharmaceutical sales in the US market also declined by $3 billion during the
four-year- period whereas Novartis reported a $3 billion growth in sales during
the four-year-period in the US market.
A key reason for the sharp
drop in pharmaceutical sales of Pfizer is the patent expiry of Lipitor, the
largest selling cholesterol drug, in 2010. Lipitor sales started declining from
$10 billion in 2010 to touch just $2 billion in 2013. During 2013, the sales of
105 blockbusters with sales above one billion dollar of these 15 companies
improved by 3.5 per cent to $ 245 billion from $236 billion in the previous
year. AbbVie's Humira for the treatment of rheumatoid arthritis, maintained the
number one position among the 105 blockbuster products with sales of $10.65
billion as against $9.26 billion in the previous year. GSK's Seretide/Advair
and Sanofi's Lantus also maintained there ranking at second and third position
with sales of $8.6 billion and $7.8 billion respectively.
A notable trend in the overall
working of global pharmaceutical industry is the steadily falling interest of
the company managements in spending on research and development. The R&D
expenditure of Pharmabiz sample of 15 companies increased by just one per cent
to $84 billion during the year ended 2013 from $83.86 billion in the
previous year. Pfizer spent 10.7 per cent less on R&D at $6.6 billion
in 2013 as against $7.4 billion in the previous year and AstraZeneca cut
its R&D expenditure by 8 per cent to $4.8 billion in 2013 from $5.2
billion. Roche and Bristol-Myers Squibb also reported lower R&D expenditure
during 2013. Amgen, Novartis and Novo Nordisk are three companies which spent
some higher amounts on R&D during 2013. New molecular research is the
driving force of the world pharmaceutical industry and the growing lack of
interest in R&D is indeed disturbing especially when the number of
deadly diseases is increasing worldwide.