Pharmaceuticals retains lead as sales rise 12%
By Geoff Dyer, Pharmaceuticals Correspondent
Published: May 5 2002 18:57 | Last Updated: May 5 2002 19:02
Pharmaceuticals maintained its record as one of the fastest-growing and most reliable industries last year, increasing sales by 12 per cent in the face of economic downturn and growing political pressure for lower prices.
Although a number of leading companies have issued profits warnings in the past year, the pharmaceuticals industry boosted sales in the crucial US market by 17 per cent, according to figures compiled by IMS Health.
The strong figures contrast with the mood of pessimism that surrounds the industry, and contradict suggestions that the rapid growth of the past decade is coming to an end.
"It is normal for individual companies to go through ups and downs, but this is still a very good industry for investors," said Joe Zammit-Lucia, president of Cambridge Pharma Consultancy, which is owned by IMS.
The sector has lost much of the premium it used to enjoy to the rest of the market as companies such as Merck, Bristol-Myers Squibb and Eli Lilly have issued profits warnings. Several larger companies have faced patent expiries on best-selling drugs while their research laboratories produced the lowest number of new drugs last year since 1994.
Yet the IMS figures, which track drug prescriptions, indicate that the $364.2bn-a- year industry is still growing at a brisk rate.
In Europe, where the big companies have complained bitterly about pressure to reduce prices, sales were 10 per cent higher at $88bn. In Japan, the industry managed only a more modest 4 per cent increase.
Pfizer's Lipitor, for lowering cholesterol, became the top-selling drug in the world with sales of $7bn, a 31 per cent increase, overtaking Prilosec, the Astra-Zeneca ulcer drug whose patent protection is the subject of a court case in New York.
Four of the top 10 therapeutic categories of drugs - for reducing cholesterol, antipsychotics, diabetes treatments and antihistamines - increased sales by more than 20 per cent last year.
Analysts said that some of the current pessimism surrounding the industry was overblown but pointed out that the rate of increase in sales in the US this year was likely to slow to around 11-12 per cent.
Moreover, there was still a large number of drugs that would go off-patent over the next two years, putting pressure on companies.
"We may be approaching the trough in terms of expectations for the US market," said Andrew Baum, analyst at Morgan Stanley.
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