Pharma’s global economic footprint is huge – and growing
The pharma industry contributes more than $400 billion to the global economy, according to new research that examines the worldwide economic importance of the sector for the first time.
The independent study commissioned by the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) reveals some startling insights – including:
- Between 2006 and 2012, the value generated by pharma outputs (called the gross value added, or GVA) increased by $129 billion to $437 billion – an average annual growth rate of 6%
- In 2012 pharma accounted for 3.8% of the manufacturing GVA worldwide – roughly equivalent to that of Argentina
- Worldwide more than 4.4 million people are employed in pharma – almost the same as the total number of people employed in Belgium.
As well as laying bare the significant contribution pharma makes globally, the report also highlights the growth in different regions – which is strongest in Asia and Oceania.
Pharma grew by a compound annual growth rate of 11.5% between 2006 and 2013 in Asia, and 11% in Oceania. These increase figures are nearly double the 6% global pharma growth, and far outstrip the rates of growth in Europe and North America, at 4.4%, and 1.7% respectively.
However, President Obama’s healthcare reforms will drive massive growth in the US pharma market, according to healthcare research firm GlobalData.
Their report predicts the size of the US sector rise will by nearly 40% over the next six years, buoyed by the increasing use of prescription drugs and the wave of people signing up for health insurance. This will swell the US pharma from an estimated value of $395 billion in 2014 to $548 billion by 2020 – or a 5.6% compound annual growth rate.
The report concludes that pharma’s economic importance “reflects often underestimated spill over effects that arise from its business activity and manifest themselves throughout the global economy”.
Dr Dennis Ostwald, chief executive of WifOR, the German independent research institute and the author of the study, says: “This highlights a shifting perspective of pharma from a cost factor to a driver of growth, employment, health and wealth. These calculations represent the beginning of profound insights into the world economy.”
Dr Brendan Shaw, assistant director general at IFPMA, adds: “The pharma industry is boosting the world economy in every regard; bringing revolutionary new drugs to patients, supporting high-value jobs and helping strengthen local communities and the world’s economy. To allow our industry to enjoy its full potential to drive significant change for the 21st century, we need to keep on creating enabling environments and incentives.”
The analysis was commissioned in response to pharma’s concerns “in the light of looming regulatory efforts of governments worldwide”, and to counter the negative perception of the pharma industry among the public. Earlier this year a survey by independent UK organisation PatientView found that in 2014, only 39% of patients said pharma companies had an excellent or a good reputation.
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