Pharmaceutical Manufacturing Industry Profile

The US pharmaceutical manufacturing industry includes about 1,500 companies with combined annual revenue of about $200 billion. Major companies include Abbott, Bristol-Myers Squibb, Eli Lilly, Johnson & Johnson, and Pfizer. The US industry is highly concentrated: the 50 largest companies account for more than 80 percent of revenue.

The global pharmaceutical manufacturing industry generates more than $800 billion in annual revenue. Major pharmaceutical manufacturers based outside the US include Bayer (Germany), GlaxoSmithKline (UK), Novartis and Roche Holding (Switzerland), and Sanofi (France).

COMPETITIVE LANDSCAPE

Demand for pharmaceutical manufacture is driven by the desire to cure illness and disease. The profitability of individual companies depends on their ability to discover and market new drugs. Large companies benefit from their economies of scale in research, manufacturing, and marketing. Small companies can compete effectively by specializing in drugs that target one or two specific ailments. The industry is capital-intensive: average annual revenue per worker is about $750,000.

The pharmaceutical manufacture industry is marked by rapid advances in scientific knowledge that produce ever-more effective medicines. The traditional drug manufacturing industry increasingly overlaps with the biotechnology industry, which is a source of many new medical treatments. To a large extent, traditional drug manufacturers are becoming development and marketing companies that acquire new drugs from smaller research companies.

Exports total about 25 percent of US production. Major export markets for US pharmaceuticals include Germany, Canada, the Netherlands, the UK, and Japan. Imports ...