The research and innovation based European pharmaceutical industry is entering an exciting new era in medicines development from the possibilities offered by personalized medicines, to the potential offered by harnessing the power of big data.
- According to Eurostat database (2018), major disease areas in Europe includes diseases of the circulatory system (36.7%), malignant neoplasms (25.4%), diseases of the respiratory system (8.5%), diseases of the digestive system (4.2%), diseases of the nervous system and the sense organs (4.1%), mental and behavioral disorders (4.1%), and endocrine, nutritional and metabolic diseases (3.0%).
- In Europe, some major steps in biopharmaceutical research, complimented by many smaller steps, have allowed for reductions in mortality, for example from HIV/ AIDS–related causes and a number of cancers. High blood pressure and cardiovascular disease can be controlled with antihypertensive and cholesterol lowering medicines; knee or hip replacements prevent patients from immobility; and some cancers can be controlled or even cured with the help of new targeted treatments. However, major hurdles such as Alzheimer’s, multiple sclerosis, many cancers, and orphan diseases remain. Similarly, the effects of Brexit on the European pharmaceutical industry is yet to be seen.
- The European pharmaceutical industry can play a critical role in restoring the growth and ensuring future competitiveness in an advancing global economy. It aims to turn fundamental research into innovative treatments that are widely available and accessible to patients.
All new medicines introduced into the market are the result of lengthy, costly and risky research and development (R&D) conducted by pharmaceutical companies. The cost of researching and developing a new chemical or biological entity was estimated at €1.9 billion in 2016.
R&D investments in European pharmaceutical industry
- During 2013-2017, 77 new chemical or biological entities were marketed in Europe, compared to 100 in United States, 30 in Japan and nearly 39 entities in rest of the world.
- In 2017, the pharmaceutical industry invested an estimated €35.2 billion in R&D in Europe with an average market growth of 4.4% for the total European market.
- In EU5 countries, the share of R&D investment in the pharmaceutical industry accounted for 19%, 15%, 4%, 3%, and 16% in Germany, France, Italy, Spain and U.K., respectively.
- Europe is now facing increasing competition from emerging economies: rapid growth in the market and research environments in countries such as Brazil and China are contributing to the move of economic and research activities to non-European markets. The geographical balance of the pharmaceutical market – and ultimately the R&D base is likely to shift gradually towards emerging economies.
Global sales of pharmaceutical products
Geographical breakdown of sales of new medicines launched during 2012-2017
- Out of the €755 billion ($852 million) global pharmaceutical market in 2017, North America accounted for 48.1% of sales compared to 22.2% in Europe, 7.7% in Japan, 5.1% in Latin America and 17% for Asia, Africa and Australia.
- In the major EU5 countries, the share of generics sales in European pharmaceutical market accounted for 32%, 19%, 47%, 21%, and 28% in Germany, France, Italy, Spain and U.K., respectively.
- According to IQVIA data (MIDAS, 2018), 64.1% of sales of new medicines launched during the period 2012-2017 were on the US market, compared with 18.1% on the European market (top 5 markets).
Market trends in European pharmaceutical industry
- There has been rapid growth in the market and research environment in emerging economies such as Brazil, China and India, leading to a gradual migration of economic and research activities from Europe to these fast growing markets.
- The geographical balance of the pharmaceutical market and ultimately the R&D base is likely to shift gradually towards emerging economies such as Brazil and China. Earlier, a decade of strong US market dominance led to a shift of economic and research activity towards the United States, and now, Europe is facing increasing competition from emerging economies due to rapid growth in the market and favorable research environments moving economic and research activities to non-European markets (DiMasi et al, Journal of Health Economics, 2016).
- During the period 2013-2017 the Brazilian, Chinese and Indian markets grew by 11.5%, 9.4% and 11.0% respectively compared to an average market growth of 4.4% for the top 5 European Union
markets and 7.3% for the US market (IQVIA Institute, 2018).
- In 2017, North America (USA and Canada) accounted for 48.1% of global pharmaceutical sales compared with 22.2% for Europe.