Global pharmaceutical industry is facing an unprecedented crisis in terms of sales growth, profitability and discovery of new drugs for the last some years now. With increasing rate of patent expiry of several blockbusters and reduced spending on research, top multinational drug companies are facing a rather gloomy future in the years to come. The Pharmabiz study of financial performances of 15 top international pharmaceutical companies during 2013 has revealed this prospects somewhat clearly. The study shows that net sales of these 15 companies from the pharmaceutical segment including vaccines and generics during 2013, remained flat at $431 billion as against $430 billion reported in the previous year. The operating profit of 15 companies increased only by 2.1 per cent to $122.4 billion from $119.9 billion in the previous year. During 2013, Swiss based Novartis International AG has emerged as the top company in pharmaceutical sales with $53.85 billion as compared to its sales of $52.93 billion in the previous year registering a growth of 1.7 per cent. Pfizer remained at the second position with a 6.5 per cent decline in pharmaceuticals sales at $47.87 billion from $51.21 billion in the previous year. Roche climbed to third spot in pharmaceutical sales among the 15 companies from fourth position in the previous year. Its pharmaceuticals sales grew by 5.8 per cent to $40.76 billion from $38.55 billion. Merck & Co went down to fourth place as its sales declined by 7.8 per cent to $37,437 million from $40,601 million. The sales performances of Pfizer and Novartis during the last four years is quite glaring. In 2010, Pfizer was top among international companies with a pharmaceutical sales of over $58 billion and Novartis in the same year had a sales of just $30 billion. Pfizer’s sales then declined to $57 billion in 2011, to $51 billion in 2012 and finally to $47 billion in 2013. During the same period, pharmaceutical sales of Novartis moved up to $53.85 billion in 2013 from $30 billion in 2010. Pfizer’s pharmaceutical sales in the US market also declined by $3 billion during the four-year- period whereas Novartis reported a $3 billion growth in sales during the four-year-period in the US market. A key reason for the sharp drop in pharmaceutical sales of Pfizer is the patent expiry of Lipitor, the largest selling cholesterol drug, in 2010. Lipitor sales started declining from $10 billion in 2010 to touch just $2 billion in 2013.
During 2013, the sales of 105 blockbusters with sales above one billion dollar of these 15 companies improved by 3.5 per cent to $ 245 billion from $236 billion in the previous year. AbbVie's Humira for the treatment of rheumatoid arthritis, maintained the number one position among the 105 blockbuster products with sales of $10.65 billion as against $9.26 billion in the previous year. GSK's Seretide/Advair and Sanofi's Lantus also maintained there ranking at second and third position with sales of $8.6 billion and $7.8 billion respectively. A notable trend in the overall working of global pharmaceutical industry is the steadily falling interest of the company managements in spending on research and development. The R&D expenditure of Pharmabiz sample of 15 companies increased by just one per cent to $84 billion during the year ended 2013 from $83.86 billion in the previous year. Pfizer spent 10.7 per cent less on R&D at $6.6 billion in 2013 as against $7.4 billion in the previous year and AstraZeneca cut its R&D expenditure by 8 per cent to $4.8 billion in 2013 from $5.2 billion. Roche and Bristol-Myers Squibb also reported lower R&D expenditure during 2013. Amgen, Novartis and Novo Nordisk are three companies which spent some higher amounts on R&D during 2013. New molecular research is the driving force of the world pharmaceutical industry and the growing lack of interest in R&D is indeed disturbing especially when the number of deadly diseases is increasing worldwide.