New York, NY (PRWEB) January 20, 2014
While the Brand Name Pharmaceutical Manufacturing industry may have been resilient against the recession, competition from generic drugs has hampered its performance over the past five years. Industry revenue is forecast to decrease at an annualized rate of 1.5% to $ 165.0 billion, with revenue declining 2.0% 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, according to IBISWorld Industry Analyst Sarah Turk. However, the industry is facing mounting competition from generic pharmaceuticals. Since the patent cliff in 2011 and 2012, many major products, such as Lipitor, have lost patent protection. Because generics are sold at a significant discount as compared to brand-name drugs, companies came under pricing pressure from downstream customers, causing operating profit to decrease.
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 allowed 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 provides a clearer path for operators to manufacture generic biologic drugs, says Turk. 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. To maintain profitability, industry operators are anticipated to continue consolidating and reducing costs, mainly through reductions in employment and research and development expenditure.
For more information, visit IBISWorlds Brand Name Pharmaceutical Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Pharmaceutical manufacturers develop prescription and over-the-counter products that are used to prevent or treat illnesses in humans or animals. Brand-name drugs and medication have patent protection. This industry does not include nutritional supplement or cosmetic product manufacturers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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