2014-04-18 21:41:01 - Brand Name Pharmaceutical Manufacturing in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com
While the United States brand name pharmaceutical manufacturing market may have proven relatively resilient to the recession, competition from generic drugs has hampered its performance over the past five years. Industry revenue is expected to fall at an average annual rate of 2.3% to $160.6 billion, including a 0.7% drop in 2013.
Historically, sales have been bolstered by favorable demographic trends and the use of medication as a significant component of healthcare in the United States; however, the industry is facing mounting competition from generic pharmaceuticals. Since 2010, many major products, such as Lipitor, have lost patent protection. Because generics are sold at a significant discount to brand-name drugs, companies came under pricing pressure from downstream customers, causing operating profit to
Players in the industry have tried to adapt to expiring patents by investing more in biological drugs. The Patient Protection and Affordable Care Act of 2010 introduced a method for the US Food and Drug Administration to approve generic biologics, but also initiated a 12-year patent period on these types of drugs. While this legislation increases the threat from generic pharmaceutical manufacturers in this segment of the industry, it also paves a clearer path for operators to manufacture generic biologic drugs.
Consequently, biologics will continue to play an important role in shaping this industry´s future. Healthcare reform is also expected to boost sales as more individuals gain prescription drug coverage in 2014. IBISWorld forecasts revenue to reach $176.7 billion in 2018, representing an estimated average annual increase of 1.9% over the next five-year period.
Nonetheless, the average operating profit margin is expected to decrease slightly to 19.6% of revenue as a result of the industry´s agreement to pay out $84.8 billion in taxes and discounts over the next 10 years to 2021 as part of the 2010 healthcare reform bill. To maintain profitability, industry operators are anticipated to continue consolidating and reducing costs, mainly through reductions in employment and research and development expenditure. During the five years to 2018, employment is projected to decrease 0.1% per year on average to 181,619 individuals.
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