A Focus on Emerging Markets

The power of emerging markets is reflected in the pharma's sales and production positions.
Mar 02, 2011
Volume 35, Issue 3

Numbers don't lie, goes the saying, and this axiom is borne out when reviewing the 2010 financial results of the pharmaceutical majors and their performance in emerging markets. Facing slowing or declining growth in the United States and Western Europe, growth in emerging markets was the strong suit for Big Pharma in 2010.

Crunching the numbers

Patricia Van Arnum
The pharmaceutical industry's focus on emerging markets stems from strong growth projections, which outpace overall pharmaceutical-industry growth. In 2011, the value of the global pharmaceutical market is expected to grow 5–7% to $880 billion, according to October 2010 estimates by IMS Health, improving from 2010 industry growth of 4–5%. Seventeen so-called pharmerging countries, as defined by IMS, are forecast to grow at a 15–17% rate in 2011 to $170–180 billion. China's pharmaceutical market, which is predicted to grow 25–27% to more than $50 billion in 2011, is currently the world's third-largest pharmaceutical market.

Company results

Big Pharma's recent sales reflect the strength of emerging markets. Pfizer, the largest global pharmaceutical company, reported 2010 biopharmaceutical sales of $58.52 billion compared with 2009 sales of $45.45 billion, a 29% gain compared with 2009 sales and reflective of Pfizer's 2009 acquisition of Wyeth. In 2010, pharmaceutical sales to emerging markets accounted for 14.8% of Pfizer's sales, or $8.66 billion, a 41% gain over 2009, when the company's emerging-market sales were $6.16 billion. For purposes of the company's reporting, emerging market sales include sales to Asia (excluding Japan and South Korea), Latin America, the Middle East, Africa, Central and Eastern Europe, Russia, and Turkey.

Pfizer's two largest-selling products overall were also its bestsellers in emerging markets. The anticholesterol drug Lipitor (atorvastatin), Pfizer's top-selling drug, had sales of $923 million in emerging markets, accounting for 8.6% of Lipitor's overall 2010 global sales of $10.73 billion. The anti-arthritis/autoimmune drug Enbrel (etanercept) posted sales of $629 million in emerging markets, accounting for 19.2% of Enbrel's total sales of $3.27 billion.

Emerging markets generated in excess of EUR 9 billion ($12.2 billion) in 2010 sales for sanofi-aventis, a 16.3% increase compared with 2009 sales. Emerging markets accounted for 29.9% of the company's total sales in 2010, making this segment the largest contributor to its group sales by region. In 2010, sanofi's pharmaceutical sales (i.e., prescription drug, consumer healthcare products, and generic drugs) to emerging markets were EUR 7.69 billion ($10.43 billion), an 11.9% increase over 2009 levels. Its pharmaceutical sales to Western Europe, however, fell 8.5% to EUR 8.72 billion ($11.83 billion), and US sales fell 7.5% to EUR 7.01 billion ($9.51 billion). Vaccine sales to emerging markets were EUR 1.39 billion ($1.89 billion), up 46.2% over 2009 levels. Vaccine sales to Western Europe declined 15.6% to EUR 282 million ($382 million), and US vaccine sales declined 11.5% to EUR 1.96 billion ($2.66 billion).

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