The global pharmaceutical industry is valued at USD 1.12 Trillion in 2018 and expected to reach USD 1.77 Trillion by 2025 with the CAGR of 6.74% over the forecast period.
The pharmaceutical industry is an integral part of health care systems comprised of public and private organizations that develop, manufacture and sale medications for both human healthcare. The pharmaceutical industry is centered upon the scientific research and development (R&D) of medicines that can effectively treat various diseases and severe disorders. Government legalizations and health care policies on pharmaceutical industry are entirely managed by the public, authorized groups and private interests. Pharmaceutical industry is subjective to a variety of laws and regulations regarding the patenting, testing, quality and marketing of drugs predominantly prescription drugs. Major differences exist between large and small organizations is large pharmaceutical companies engage in a comprehensive range of drug discovery, development, manufacturing and quality control, marketing and sales, whereas smaller companies focusing on a particular goal.
High healthcare spending, growing research and development activities on medicines to meet the world’s expectations and rising demand for vaccines to treat various disorders are the major factors contributed to the increasing demand of global pharmaceutical market. For example; in 2018, U.S. health care spending increased about 4.7 % reached at USD 3.6 trillion. Healthcare spending accounted for around 17.21% of the nation's gross domestic product. The pharmaceutical industry is one of the highly regulated sectors by the application of the principles of good manufacturing practice (GMP) and laws are enforced by government and domestic as well international agencies.
In many developed countries, the growth of OTC (over-the-counter) drugs is likely to be growing at the highest CAGR. The global OTC drug market was worth of around USD 113 billion in 2017 and developed countries it is accounted for approximately 57% of the total. The US market is the leading country both in terms of overall revenue and on a per capita spending. In addition, OTC drug related reform and deregulation such as medical insurance and online retailing would be generated the possibility of finding new business opportunities in pharmaceutical sector.
Johnson & Johnson announced a collaboration to expand manufacturing capabilities for its COVID-19 vaccine candidate.
On 18th May 2020; Johnson & Johnson announced collaboration between the Janssen Pharmaceutical Companies of Johnson & Johnson and BioSolutions, Inc. to upkeep the manufacturing facilities of its COVID-19 vaccine candidate. Johnson & Johnson is heavily investing to extend its drug substance capacity associated to the vaccine candidate. The Company has already started manufacturing clinical vaccine production at its facility in the Netherlands, with the objective of starting Phase 1 human clinical studies of its vaccine candidate in September 2020. The additional global capacity will help in the rapid production of a vaccine to enable the optimum supply of over 1 billion doses of a safe and effective vaccine around the world.
Sanofi announced that they will form new industry leading European company to deliver active pharmaceutical ingredients (API).
On 24th February, 2020; Sanofi planned to form a leading European company that will drive the production and marketing to third parties of active pharmaceutical ingredients (API). These are the essential molecules used in the composition and production of any drug. This project will form Standalone Company which would combine Sanofi’s API commercial and development activities with six of its European API production sites. By operating independently, this projects help in increasing its sales capacities to third parties and enable the expansion of its partnerships with other pharmaceutical companies in to take competitive advantage of new growth opportunities.
Top Pharmaceutical Industry Trends Shaping the Future:
Artificial intelligence (AI) technology is rapidly becoming essential belongings of efficiency for pharmaceutical companies. Implementation of AI can be advantageous to make data driven decisions quicker and boost R&D capabilities, where drug developers are actively discovering a wide range of novel and favorable uses AI can have a positive impact from new pharma perspectives. High initiatives are currently taken by pharma companies that are seeking ground breaking uses for AI in their manufacturing of drugs like precision medicine and in the creation of hyper targeted drugs. AI and machine learning can be set up for disease treatment, radiology and radiotherapy planning, research & development and clinical trials. Also, the development of personalized medicine, rare disease identification and drug discovery can be carried out from using AI technologies.
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Nowadays, many pharma companies are recognizing the possible benefits of cloud computing that enables higher efficiencies, cost savings and drives competitive advantages without risking security or compliance. Its implementation can improve the quality of data to support sales and marketing of drugs and provides new ways for clinical trial site managers to communicate easily across wide geographic boundaries. For example; Johnson & Johnson had taken 85 % of its apps in the cloud in 2018. In addition, having 40 % of existing software applications saved their technology maintenance expenses.
Legalization of medical marijuana is significantly transforming the pharmaceutical industry. In 2018, U.S. Food and Drug Administration (FDA) approved its first cannabidiol (CBD) medication. For example; Epidiolex for epilepsy treatment is opening the new gateways for pharmaceutical companies to get involved in the medical marijuana market. Based upon its applications, the global medical cannabis market is estimated to exceed around USD 55 billion by the end of 2024. Additionally, in March 2019, Farmako signed a contract to import around 52 tons of pharmaceutical cannabis from Pharmacann Polska in the European market in the coming years. Recent and upcoming legalization of cannabis for medical purposes is one the major Pharmaceutical Industry Trends which is strengthening the medical marijuana market
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Personalized medicine is changing health care landscape that has ability in leading the pharmaceutical industry with significant changes. Personalized medicine has huge potential to transform the pharmaceutical value chain right from early product development, manufacturing to go-to-market models. Many pharmaceutical companies have kept the goal to improve process of right drug, patient, accurate time mainly in therapeutic areas such as oncology and neuroscience.
For example; in 2018, there were around 25 personalized medicines approved by FDA represented approximately 43% of all 2018 drug approvals. This upsurge in approvals is due to favorable initiative policy made by the FDA in 2018 that would enhance commitment to accelerating personalized medicine. There are more opportunities will transform personalized medicines use to make a drastic changes in patients’ health in the coming years.
Value based healthcare is highly adopted by the pharmaceutical companies by realizing its significance to reduce health costs and improve patient outcome. Personalized medicine makes it easy to shift toward value based medicine by serving to offer more effective therapies with minimal pricing.