In poor health: Price disclosures and growing competition have ailed industry revenue

Pharmaceutical Product Manufacturing industry operators have faced several challenges over the past five years. Echoing trends in global pharmaceutical manufacturing, these challenges have included a changing regulatory and risk environment, a patent cliff that has taken away players' exclusive manufacturing rights to some of the most profitable drugs in the industry's history, and reform-driven pricing pressures. On the local front, ongoing reforms to the Pharmaceutical Benefits Scheme (PBS) have been particularly significant, with mandatory price disclosures continuing to reduce prices. Increasing regulation and competition have also challenged local industry players...read more.

Industry Statistics & Market Size
Revenue
$8bn
Annual Growth 13-18
-3.3%
Forecast Growth 18-23
Profit
Employment
13,081
Businesses
385

Industry Threats & Opportunities

  • Industry players are likely to adopt new business models as key drugs lose patent protection
  • The industry is highly dependent on imported products, including active ingredients
  • Ongoing deflationary pricing pressures are forecast to constrain industry revenue growth
  • Industry Report - Starting a New Business Chapter

    Substantial barriers to entry to the industry exist, not least of which is the fact that the industry is becoming increasingly globalised, with the dominant major players operating on a large global scale. The high and rising costs of R&D, combined with declining R&D productivity pose another substantial obstacle. A new medicine can cost as much as US$2.6 billion to develop with a 10 to 15 year time frame before it makes it to market. Furthermore, according to Medicines Australia, it can then take 22 months to get a new medicine listed on the PBS. High capital expenditure is also required at the onset to establish a manufacturing plant geared to producing high-cost, high-technology drugs.Government policies can be significant barriers to entry. Not...purchase to read more.

    Additional Insights for the Pharmaceutical Product Manufacturing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pharmaceutical Product Manufacturing Industry are

  • Economies of scale
  • Establishment of brand names
  • Having technology sharing arrangements with major players
  • IBISWorld analysts also discuss how external factors such as Federal funding for the Pharmaceutical Benefits Scheme and Population aged 50 and older in the Pharmaceutical Product Manufacturing industry impact industry performance..

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    What's in this report

    What is the Pharmaceutical Product Manufacturing Industry?

    The industry comprises companies that manufacture medicinal and pharmaceutical products for human use from both synthetic (chemical) and natural sources. Other products include chemical or diagnostic testing agents, blood serums and biotech products. Industry activities include manufacturing active pharmaceutical ingredients and synthesising chemical ingredients, late-stage packaging and fill-finish activities.

    Industry Products
  • Benefit-paid pharmaceuticals
  • All other medications
  • Vitamins and dietary supplements
  • OTC medicines
  • Other complementary medicines
  • Industry Activities
  • Antibacterial, antibiotic and antitoxin
  • Vaccine
  • Vitamin product
  • Herbal drug
  • Ampoule, medicinal capsule, medicinal ointment and vial
  • Biotechnological pharmaceutical and medicinal products
  • Serum and blood serum
  • Diagnostic substance
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Federal funding for the Pharmaceutical Benefits Scheme
  • Population aged 50 and older
  • Health consciousness
  • Trade-weighted index

  • Current Performance
  • Volatile performance
  • Manufacturing capacity cuts
  • Reliance on imports
  • Ongoing PBS changes
  • Chart: Revenue Growth

  • Industry Outlook
  • Long-term survival
  • Ongoing consolidation
  • Table: Pharmaceutical Product Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pharmaceutical Product Manufacturing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • General Hospitals
  • Pharmaceuticals Wholesaling
  • Pharmacies

  • Key Selling Industries
  • Adhesive Manufacturing
  • Cosmetics, Perfume and Toiletries Manufacturing
  • Packaging Services
  • Soap and Cleaning Compound Manufacturing

  • Products & Services
  • Benefit-paid pharmaceuticals
  • All other medications
  • Vitamins and dietary supplements
  • OTC medicines
  • Other complementary medicines
  • Chart: Pharmaceutical Product Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Wholesalers
  • Export markets
  • Hospitals and pharmacies
  • Other retailers
  • Chart: Major Market Segmentation for the Pharmaceutical Product Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Pharmaceutical Product Manufacturing

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pharmaceutical Product Manufacturing Industry

  • Industry Globalization
    GlaxoSmithKline Holdings Pty Ltd, AstraZeneca Pty Limited, Aspen Asia Pacific Pty Ltd, Pfizer Australia Holdings Pty Limited, Mylan Australia Holding Pty Ltd,
  • Table: GlaxoSmithKline Holdings Pty Ltd - financial performance
  • Table: AstraZeneca Pty Limited - financial performance
  • Table: Aspen Asia Pacific Pty Ltd - financial performance
  • Table: Pfizer Australia Holdings Pty Limited - financial performance
  • Table: Mylan Australia Holding Pty Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pharmaceutical Product Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pharmaceutical Product Manufacturing Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Exports (2009-2023)
  • Imports (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Biological Medicines
  • Biological medicines are those created by biological processes from living organisms as opposed to those that are chemically synthesised.
  • Biosimilars
  • Biosimilars are a biological medical product that is a copy of an original biologic product. They can be known as follow-on biologics.
  • Blockbuster Drugs
  • Products generating annual sales of $1.0 billion or more.
  • E-Detailing
  • Information-technology supported promotional activities.
  • Expanded And Accelerated Price Disclosure (Eapd)
  • Under EAPD all Formulary 2 drugs are treated the same way and a new brand will no longer be required to trigger price disclosure.
  • Over-The-Counter (Otc)
  • Refers to products that can be obtained from a pharmacy or chemist without a prescription.
  • Patent Cliff
  • Refers to the potential fall in revenue following the patent expiration of key products.
  • Pharmaceutical Benefits Scheme (Pbs)
  • A Commonwealth Government program that reduces the cost of pharmaceuticals for consumers to a maximum co-payment by subsidising the additional cost.
  • Price Disclosure Reforms
  • These are designed to progressively reduce the price of those PBS medicines subject to competition.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Pharmaceutical Product Manufacturing market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Pharmaceutical Product Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pharmaceutical Product Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pharmaceutical Product Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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