With global sales exceeding €500bn, the pharmaceutical industry is one of the world’s biggest.  It includes not only the producers of blockbuster and generic drugs, but also companies that supply drug marketing and delivery services, as well as animal health specialists.  Overall, growth prospects for the global pharma market are favourable but its shape is evolving rapidly:

• The dominance of the blockbuster drug has passed its peak.  Few major successes have emerged over the last decade, while the €800m development cost per drug is a strain on even the biggest balance sheet.
• Generic drugs are playing an increasing role.  Many patents on existing blockbuster drugs have expired in recent years, providing significant opportunities for generic versions.  This trend is reinforced by the continuing drive to get better value from healthcare budgets.
• The biotech sector is a key source of innovation.  Companies are competing to turn the concept of personalised medicine into reality: assessing an individual’s predisposition to disease well ahead of its likely onset and tailoring the right drug, for the right person, at the right time.

The pharma business is truly global, because its products transfer readily to different parts of the world with a minimum of local adaptation.  This gives the companies we partner some clear paths to success:

• By developing a specialist drug with modest but global demand, a pharma business can achieve international leadership.
• When a company has a product that’s been successful in its local market, it can quickly access large markets by migrating it regionally or world-wide.
• The increasing use of generics places an emphasis on low-cost production, to the advantage of many manufacturers in Asia.