Industry Trend Analysis - Patented And Generic Drugmaker Prospects Vary Across The Region - APR 2017

BMI View: Drugmakers will face an increasingly challenging environm ent across the European region: rising demand for medicines will push payers to focus on cost containment. While there are significant growth opportunities in the emerging Eastern European markets, innovative drugmakers will continue to favour the Western European region on account of the more advanced regulatory environment coupled with a higher demand for and greater ability to afford high-value medicines. While pharmaceutical spending is rising in the CEE region, lower per-capita spending on medicines will facilitate the uptake of generic medicines over high-value patented medicines.

In the coming years, healthcare payers across Europe will face increasing challenges to finance medicine demand given rising demand for, and consumption of, drugs. This will be exacerbated by ageing populations which will drive up the prevalence of chronic diseases. In response, we foresee an increasing focus on cost-efficiency which will manifest itself through greater pricing pressures on drugmakers, generic substitution policies and rational prescribing initiatives. This will cause headwinds to multinational pharmaceutical manufacturers' revenues. Here we analyse the patented medicines market in Europe and assess opportunities for innovative drugmakers.

Innovative drugmakers will find the Western European region more receptive to their products, as highlighted by the share of patented medicine sales as a proportion of total market size ( see below). The foremost driver for innovative drug sales outperformance in Western Europe relative to Central and Eastern Europe (CEE) is the purchasing power of the more affluent West. In addition, the more advanced regulatory environments and strong levels of intellectual property protection make these markets far more attractive to makers of high-value patented drugs.

Demand For Patented Drugs High In Western Europe
Patented Medicine Sales Market Share (%)
Note: Red = Western European markets; Navy = CEE markets, members of the EU; Light Blue = CIS countries; Pale Blue = CEE markets, neither EU members nor CIS countries. Source: BMI

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