Countries covered: Europe
Major Pharmaceutical Markets in Europe
"What - and where - are the opportunities for pharmaceutical companies?
This report provides: Comparative regional overview Market valuations for 7
key markets 5-year forecasts to 2010 for each market Market outlook
Comprehensive background and trade data
The seven main european markets represent a marketplace for pharmaceutical
products worth US$162 billion a year
If you operate in Europe, what are the prospects for growth and what
operating environment will you face in the future? News stories chronicle
the pressures and problems facing governments trying to expand or maintain
provision in a cost-constrained world. But one fact remains. The seven
countries covered by this report represent a total pharmaceutical market
value of US$162 billion, which is expected to grow by US$47 billion over the
next five years!
The seven markets are diverse in terms of health provision, funding,
domestic production and health plans. The market is expanding due to an
ageing population, earlier diagnosis of disease and wider use of
pharmaceuticals. Government responses to meeting the rising demands in
publicly funded health - and especially the drugs bill - range from
increased health insurance, co-payments and related taxes to increased use
of private funding and generic substitution. Increasingly, battles about
reimbursement levels and pricing are set to hot up in the coming years.
While growth in the generics sector looks set to continue - particularly in
markets where current levels of generic subscribing are low. The migration
of R&D to countries that offer more advantageous commercial and research
environments will become a cause for concern.
This report provides key decision support data To understand the commercial
and economic issues that are driving change in Europe, it is vital to have
independent and expert analysis. That is why Espicom Business Intelligence
has published this new 350-page management report Major Pharmaceutical
Markets in Europe. In addition to highly detailed analysis of each market,
the report provides a thought-provoking and comparative examination, putting
opportunities into their current and future context. "
The report analyses the following key markets:
FRANCE At US$660, France has one of the highest pharmaceutical per capita
consumption levels in the world. The pharmaceutical market is also one of
the world’s largest, with total spending valued at US$39.5 billion in 2004.
Overall market growth is comparatively low at around 6% per annum.
The underdeveloped generics market is undergoing rapid expansion, as around
100 compounds with combined annual sales of €3.8 billion are due to come off
patent between 2004 and 2007.
The stagnating OTC market is also finally set to expand as a result of
government plans to end reimbursement for a wide range of products assigned
a low medical value rating.
France is the third largest producer of pharmaceuticals in the world
accounting for 7% of global pharmaceutical output. GERMANY Germany is the
third largest pharmaceutical market in the world and is the largest in
Europe. Although the domestic consumption of pharmaceuticals is being
constrained by government policy, the export market continues to expand.
Germany also has the largest generic market in Europe.
Major healthcare reforms were introduced in January 2004. One of the aims
was to reduce the average contribution rate to health insurance companies.
Another aim was to reduce overall pharmaceutical expenditure, especially by
the statutory health insurance (GKV).
The German pharmaceutical industry is under severe price constraints and
methods imposed by the government limit pharmaceutical expenditure. Coupled
with increasing compulsory manufacturer discounts, the pharmaceutical market
is unlikely to expand in the coming year. ITALY The size of the
pharmaceutical market in Italy is estimated to be approximately US$27
billion, equal to US$474 per capita. This is comparable in size to the UK.
The pharmaceutical market is expected to increase by 5.3% year on year to
Recent forecasts suggest that GDP will increase by 2% in 2006, from 1.2% in
2005, as a result of increasing levels of investment and exports. Consumer
prices are forecast to increase by 1.8% in both 2005 and 2006.
In an effort to increase efficiency in the healthcare sector, the use of an
electronic ‘health card’ is being tested in Northern Italy. NETHERLANDS As
the costs of healthcare are increasing, the Dutch government is aiming to
reduce drug expenditure rather than usage, via agreements with
pharmaceutical trade associations. This has resulted in drastic price cuts
being imposed on both branded and generic pharmaceuticals.
The market for generic pharmaceutical products is growing more rapidly than
for branded products. This trend is set to increase as there are a number of
widely used products coming ‘off patent’ in the near future.
The government is introducing a mandatory health insurance scheme, which
will commence in January 2006. This will replace the current two-tier
The Netherlands has a well-respected contract research and development
environment, although few multinationals currently have manufacturing plants
there. SPAIN The Spanish pharmaceutical market is the fifth largest in the
EU and the seventh in the world. In 2005, pharmaceutical expenditure at
retail prices is valued at E16 billion, or US$19.3 billion. Prescription
only medicines (POM) account for 95.3% of the pharmacy market. Generics
represent 4.5% of the pharmacy POM market.
Health expenditure has been frozen in Spain at 7.5% of GDP between 1997 and
2004. Approximately 72% of total health spending comes from the public
sector, equal to €42.4 billion in 2004 of which pharmaceutical expenditure
represented 22.7% equal to €9.5 billion. After Greece, Spain has the
cheapest drugs in the EU.
The government has introduced numerous cost-containment measures in recent
years, including the suspension of the reference price system early in 2005,
a new 2% tax on pharmaceutical sales as from January 2004, a 4.2% drug price
reduction as from March 2005, decreasing wholesalers’ margins and the
promotion of generics. SWITZERLAND
The medical equipment and supplies market in Switzerland was estimated to be
approximately US$2.2 billion in 2005, which is comparable to the
Netherlands. In terms of per capita expenditure, the Swiss market is ranked
second globally behind the USA.
Switzerland represents a wealthy market where hospitals, clinics and
physicians invest in new equipment and devices, although an increasing
culture of cost awareness is spreading throughout the healthcare system.
Although Switzerland remains outside of the European Union, the federal
government has increasingly aligned its medical device regulations to those
of the EU. UK Healthcare is never far from the top of the political agenda
in the UK. With far reaching government reforms of the National Health
Service, expenditure on the NHS has increased by 45% since 1997.
Public-Private Partnerships funding the structural expansion of the NHS is
just one of the issues facing the present government.
The pharmaceutical market is expected to grow by approximately 8% over the
course of the next four years, way above GDP growth. The value of
prescriptions increased by just under 10% between 2002 and 2003, whereas the
number of prescriptions increased by 5.1% for the same period.
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