Introduction to the pharmaceutical industry worldwide

3 basic categories:

• Research based pharmaceutical companies
• Generic drug manufacturers
• OTC ( Over the counter) pharmaceutical companies. Some companies are active in more than one of the categories mentioned.

Characteristics of research based pharmaceutical companies

• Innovative. High expenditures into Research and Development
• Often global players
• Sophisticated marketing and educational activities
• Provide value for money

Drop in death rates for diseases treated with pharmaceuticals 1965 - 1996

Disease	Treatment	% drop in death rate
Rheumatic fever and rheumatic heart disease	Antibiotics	83%
Atherosclerosis	ACE inhibitors, Beta Blockers, nitrates	74%
Ulcer of stomach and duodenum	H2 Blockers, proton pump inhibitors	72%
Ischemic heart disease	ACE inhibitors, Beta Blockers, nitrates	62%
Emphysema	Anti-inflammatories, bronchodilators	57%

 Source: PhRMA 

R&D expenditures in % of sales

US based research based pharmaceutical companies	20.8%
Global pharmaceutical sector	17.3%
Computer software and services	9.3%
Office equipment and services	9.3%
Electrical and electronic devices	6.4%
Telecommunications	5.7%
All industries excluding pharma	4.1%

Source: PhRMA

Company financed R&D by product class in 2000

Central nervous system	22.8 billion MR
Neoplasms, endocrine and metabolicdiseases	19.0 billion MR
Cardiovascular system	15.6 billion MR
Infective and parasitic diseases	13.7 billion MR
Biologicals	9.1 billion MR
Others	93.5 billion MR
Total	164.5 billion MR

Source: PhRMA & IFPMA

Global Pharmaceutical Sales in 2000 by Region in billion MR

580+14%   North America
286+8%     Europe
196+3%    Japan
72+9%      Latin America
71+10%   Asia,Africa,Australia

Pharmaceutical Market in Malaysia

• Over 100 pharmaceutical companies
• Most of the world largest pharmaceutical companies are represented
• Total market estimated at MR 1.4 billion
• Growth in 2000 of over 15%

Distribution channels of pharmaceuticals in Malaysia

30% Pharmacies
26% Doctors
19% Government hospitals
14% Private hospitals
 11%  others

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