Pharmaceutical industry to gradually transform over next five years: IBISWorld

IBISWorld research predicts that the Australian pharmaceutical industry will see continued consolidation and slowed growth due to expirations in patent protection and other factors.

Their Pharmaceutical Product Manufacturing Market Research Report predicts that industry revenue will decline by 2.1 per cent for 2012-13. IBISWorld’s Kosta Lev said that “domestic demand will be greater than revenue in 2012-13, highlighting the dominant role that imports play in the industry,” which is a net importer, though one of Australia’s leading high-tech exporters.

The top four players in Australia – Prifzer, GlaxoSmithKline, AstraZeneca and Sanofi-Aventis – make up a significant part of the market. ““This partly reflects the number of mergers that have occurred in the past few years,” said Lev.

The Australian market is expected to continue gradual consolidation, which IBISWorld puts down to factors such as slow increases in revenues, increased safety concerns, lower research and development productivity and increased competition. The expiration of patent protection for a number of popular drugs between 2011-2015 is also expected to soften profitability.