Global Overview of the Pharmaceuticals and Medical Equipment Industry

November 2023

This briefing examines how the pharmaceuticals and medical equipment industry is performing globally and in the largest countries in terms of pharmaceuticals and medical equipment output. The report also provides data for production, market size, imports, exports, industry costs, industry profitability and number of companies. The industry and market overview provide benchmarks against other countries in the region.

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Key findings

Rising investment in R&D and innovation

The growing number of elderly people and the increasing occurrence of chronic illnesses are expected to boost the need for innovative, high-value treatments. The trend is likely to spur investments in research and development (R&D), particularly in fields such as oncology, immunology, neurology, and cardiovascular and metabolic diseases. Biologics are anticipated to maintain their status as one of the most rapidly expanding sectors, underscored by the escalating significance of personalised medicine.

Supply chain transformation

The pandemic and the war in Ukraine have led to widespread supply issues for active pharmaceutical ingredients (API) and other healthcare products. Efforts by governments to strengthen supply chains should enable new sourcing strategies and the domestic production of key pharmaceuticals and medical devices.

Innovative production methods and digitalisation

Pharmaceutical manufacturers are adopting innovative production techniques like continuous manufacturing, single-use technologies, and modular solutions to cut costs, save time, and enhance reliability. The shift towards smart production, which includes the digitalisation of manufacturing processes, automation, and robotics, is also set to drive the industry's advancement.

Cost-conscious environment

As the need to cut healthcare costs intensifies, increasing pressure on pharmaceutical pricing is likely to squeeze producers' profits. Pharmaceutical pricing pressure is expected to boost the demand for generics and biosimilars, encourage early diagnostics for better preventive healthcare, and prompt a move towards value-based pharmaceutical contracts.

Scope
Key findings
The industry's real-term growth is set to slow amid healthcare sector pressures and rising costs
China and the US are set to lead globally, while India is on track for the most rapid expansion
Higher wages and rising material and energy costs are inflating production expenses
Higher costs squeeze profit margins, but total profits grow in 2022 due to rising revenues
Western Europe maintains its position as the leading pharmaceutical exporter
Western Europe tops global imports, while Latin America showcases the quickest growth
Key trends
Macroeconomic/industry trends
Shanghai Pharmaceuticals dominates, but American firms hold the majority of top positions
Rising number of companies is mostly attributed to sector growth in developing countries
Despite ongoing consolidation, industry concentration is expected to remain low
China : Persistent demand from the vast and ageing populace to underpin industry growth.
China: Key trends in the country 2023/2024
USA : Production is set to decelerate through to 2024 due to a healthcare sector slowdown
USA: Key trends in the country 2023/2024
Ireland : Following a 2023 s lowdown , the industry is set to resume its steady growth in 2024
Ireland: Key trends in the country 2023/2024
Switzerland : The industry is set for steady growth throughout 2024, surpassing regional peers
Switzerland: Key trends in the country 2023/2024
Germany : Production growth to slow in 2023, then accelerate sharply from 2024
Germany: Key trends in the country 2023/2024
Puerto Rico : Industry’s real term growth to remain subdued over the short term
Puerto Rico : Key trends in the country 2023/2024
Japan : The sector's medium-term growth to lag behind other top pharmaceutical producers
Japan: Key trends in the country 2023/2024
France : Growth is set to accelerate starting from 2024, impacted by substantial investment
France: Key trends in the country 2023/2024
Italy : Production growth is set to slow down over the short term due to cost pressures
Italy: Key trends in the country 2023/2024
United Kingdom : Industry ’ s output to see minor decline by 2024 as demand softens
United Kingdom: Key trends in the country 2023/2024
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