Drug Development in the European Union
The European pharmaceutical companies have introduced some of the world’s most successful proprietary drugs and contributed significantly to the European economics. The pharmaceutical industry is the fifth largest industrial sector in the EU, amounting to 3.5% of the total manufacturing production (Eurostat) and it employs about 600,000 people throughout the area. However, European pharmaceutical development and production has been declining. The European industry has been losing competitiveness as compared to the USA. In 1992, 6 of the top 10 biggest selling medicines in the world were originated in Europe while 4 were from the US. In 2002, only 2 of the top 10 sellers were from Europe. The European commission’s trying to reserve this trend and make Europe again a center of pharmaceutical industry.
External and internal downward pressures exist in both European and American pharmaceutical markets. However, European pharmaceutical firms are more-likely having disadvantages to play in the global market place to compete with their U.S. competitors.
Traditionally, the global pharmaceutical industry was characterized by rapid growth, high profits and structural stability. In the 1990s, the pharmaceutical industry has been one of the most profitable in the world and the number of blockbuster drugs, with sales over $1 billion per year, grew from four to 55. And for both 2000 and 2001, pretax margins at the top 10 global pharmaceutical companies ranged from 16% to 35% and averaged just over 26%.
However, several trends that had emerged in the 21st century have increased the cost and risk in new drug development. According to one estimate, as much as 50% of all development costs were expended on products that never reached the market.
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