Medical Markets on the Move

To assess biotechnology markets around the world, a range of factors can be measured. The largest markets for pharmaceuticals, for example, lie in three regions: the U.S., Europe and Japan. For sales of new medicines from 2005 through 2009, the U.S. market was twice as large as the biotechnology market for all of Europe. And even though Japan takes third place in this list, it only creates 4 percent of the market for new medicines. Given Japan’s recent challenge of handling a natural disaster—a major earthquake followed by a tsunami and serious aftershocks—that also induced a crisis at a nuclear power plant that has not been completely controlled or assessed as we go to press, it remains to be seen how this country’s biotechnology, medicine and overall technology markets will fare in the near future.

What the existing data do confirm, though, is growth in the pharmaceutical market around the world. For 2004 through 2009, regions around the world showed expansion. In combination, the mega-region comprised of Africa, Asia and Australia posted a 13.9 percent rate of growth, while North America and Europe’s markets grew by only 5.5 and 6.6, respectively. Latin American countries as a group also show significant growth, reaching a rate of nearly 11 percent for this period. In addition, Japan experienced growth of more than 4 percent. For the rest of the world combined, the growth rate for the pharmaceutical market was 6.7 percent.

To study the pharmaceutical market today and forecast its near future, both the current sales market as well as the growth occurring in regions around the world must be considered. For example, the high rate of growth across Africa, Asia and Australia, although significant in size, has yet to create significant new-medicine markets for these countries, especially when compared with the U.S. and Europe. In fact, the markets of these three continents do not add up to the new-medicines market in Japan from 2005 through 2009. Moreover, even if the U.S. market for new medicines did not change, and Europe’s growth rate stayed strong at 6.6 percent, it would take more than a decade for Europe’s market to match the U.S. Consequently, it will take much longer for other countries or regions to contend for top places on the world market for new medicines.

So for regions with small markets today, it would take gigantic rates of growth from them or virtual collapses from some of today’s leading regions or countries to swing the pharma-market pendulum completely. Such dramatic changes, although possible, seem unlikely. As a result, the distribution of medical markets around the world—at least in volume—are not likely to change significantly over the next few years. For long-term planning, on the other hand, pharmaceutical companies must take notice of the leading growth rates, which could forecast the medical-market leaders of the future.