Industry Trends Pharmaceuticals September 2024

Market Monitor

  • Brazil,
  • Canada,
  • China,
  • France,
  • Germany,
  • India,
  • Ireland,
  • Japan,
  • Mexico,
  • Switzerland,
  • USA,
  • United Kingdom
  • Chemicals/Pharma

10th September 2024

Atradius sector experts share their insights into the key issues affecting the industry globally, in the Americas, Asia Pacific and Europe.

Global pharma performance: Ageing populations, emerging markets demand and new products drive growth

  • Looking ahead global pharmaceuticals output growth will remain robust, forecast to increase by 3% in 2024, 4% in 2025 and 3.6% in 2026.
  • Regions with the largest annual growth rates are Asia Pacific and the Middle East.
  • In the mid and long-term, producers of speciality products, medicines for chronic conditions and generic drugs will find opportunities for growth among ageing populations.
  • Producers of medication for weight-loss are facing growth predictions of about USD 80 billion by 2030.

United States: Robust sales and low credit risk characterise the sector

  • US pharmaceuticals output is expected to increase by 2.9% in 2024 and 2.5% in 2025. After a 17.3% surge in 2023, investments are forecast to increase by 15.8% this year.
  • Ongoing demand will be driven by the ageing population. A surge in demand for weight-loss drugs will also benefit the US pharmaceuticals market in the coming years.
  • Margins for branded pharmaceuticals are robust, leading to strong cash flow and credit profiles.
  • However, drug pricing regulation could impact the industry, as the US government has taken steps to reduce the price of pharmaceuticals for consumers.

China: Government support drives innovation and better access to healthcare

  • We expect Chinese pharmaceuticals production to grow by 7.7% in 2024 and by 6.1% in 2025.
  • Pharmaceutical investments in China are forecast to increase by 7% annually in 2024 and 2025. The government strongly supports investment and R&D in order to shift away from producing generics and towards high quality drugs and biopharmaceutical innovations.
  • Domestic demand will be boosted by a growing middle class that can afford high value-added drugs. At the same time the population is ageing, which will spur demand for drugs related to chronic illnesses.

India: Strong expansion of manufacturing base expected in the coming years

  • After a 16.1% increase in 2023 we expect pharmaceuticals output to grow by 3.8% in 2024 and by 10.4% in 2025. Most businesses have strong balance sheets and good access to bank financing.
  • The government has announced a large incentive scheme to boost local API production in order to compete with China. Together with a growing population and rising middle class, this could bolster India’s path to becoming one of the world’s largest pharmaceuticals manufacturers over the next decade.
  • However, quality standard issues and incidents of alleged drug contamination remain downside risks.

European Union and UK: Ongoing growth and high M&A activities in the region

  • After levelling off in 2024, we expect pharmaceuticals output and sales in the EU and the UK to grow by more than 3% annually in 2024 and 2025.
  • Local production will benefit from announcements by both Novo-Nordisk and Eli Lilly to make large investments in several European countries in order to increase output of their weight-loss drugs.
  • For the most part, financial indicators in the industry are strong, but some SMEs could face financing challenges. This is due to high R&D costs, competition from India and China, and difficulty accessing financing at competitive interest rates.
  • M&A activity between larger pharmaceutical producers and smaller, often specialist pharmaceutical producers and biotech businesses is booming. We expect this dynamic trend to continue in the coming years.
  • However, there are some concerns about the international competitiveness of the European pharmaceuticals sector in the longer term.

Please download the report below to read more about the latest industry developments and trends - provided by our regional pharmaceuticals sector experts.

 

 

 

 

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