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ISBN 1-85765-262-2

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Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Introduction

OVERVIEW

INDUSTRY SUPPLY

OTC PHARMACEUTICALS

PRESCRIBED PHARMACEUTICALS

RESEARCH AND DEVELOPMENT

ORIGINAL CONSUMER RESEARCH

THE FUTURE

The Total UK Pharmaceutical Industry

INDUSTRY BACKGROUND

PATENTS

INDUSTRY REPRESENTATION

THE NATIONAL HEALTH SERVICE (NHS)

TOTAL MARKET SIZE

GLOBAL PERSPECTIVES

CURRENT ISSUES

Table 2.1: Total UK Market Size for Prescribed and OTC Pharmaceuticals (£m), 1991-1994

Table 2.2: World Pharmaceuticals Market, Year to 31st March 1994

Table 2.3: World Pharmacy Drug Purchases in the World's Ten Leading Markets ($m), January-October 1994

Table 2.4: Estimated Share of World Pharmaceuticals Output ( percent), 1994

Table 2.5: Overseas Trade in Pharmaceuticals (£m), 1950-1994

Industry Supply

NUMBER OF COMPANIES BY TURNOVER SIZE

EMPLOYMENT

CORPORATE ACTIVITY

LEADING WORLD PHARMACEUTICAL COMPANIES

Table 3.1: Manufacturers of Pharmaceutical Products: Number of Companies by Turnover Size, 1994

Table 3.2: Manufacturers of Pharmaceutical Products: Number of Local Units and Employment, 1994

Table 3.3: Total Employment in the Pharmaceutical Industry (000), 1982-1994

Table 3.4: Leading World Pharmaceutical Companies by Turnover ( percent), 1993/1994

Table 3.5: Share of Total Sales Taken by Pharmaceuticals for Major Companies ( percent), 1993/1994

Table 3.6: Analysis of Glaxo PLC's Results (£m and number, Year Ending 30th June 1993 and 1994

Table 3.7: Glaxo Products Launched, 1983-1993

Table 3.8: Analysis of Glaxo's Sales by Therapeutic Group (£m and percent), 1993/1994

Table 3.9: Analysis of Glaxo's Sales by Geographic Region, Year to 30th June 1994

Table 3.10: Analysis of Wellcome PLC's Results (£m and number), Year to 31st December 1993 and 1994

Table 3.11: Analysis of SmithKline Beecham PLC's Results (£m and number), Year Ending 31st December 1993 and 1994

Table 3.12: Sales and Trading Profits by Sector for SmithKline Beecham PLC (£m), 1993 and 1994

Table 3.13: SmithKline Beecham's New Product Sales (£m), 1994

Table 3.14: SmithKline Beecham's Pharmaceutical Sales by Region (£m and percent), 1994

Table 3.15: Analysis of Zeneca Group PLC's Results (£m and number), Year to 31st December 1993 and 1994

Table 3.16: Zeneca Group PLC's Sales by Main Products (£m), 1994

Table 3.17: Zeneca Group PLC's Geographical Distribution of Pharmaceutical Sales (£m and percent), 1994

Table 3.18: Zeneca Group PLC's Recent Launches of Major Products, 1985-1993

Table 3.19: Analysis of Fisons PLC's Results (£m and number), Year to 31st December 1993 and 1994

Table 3.20: Analysis of Medeva PLC's Results (£m and number), Year to 31st December 1993 and 1994

Table 3.21: Analysis of Reckitt & Colman PLC's Results (£m), 1993 and 1994

Table 3.22: Analysis of Scotia Holdings PLC's Results (£m and number), Year to 31st December 1993 and 1994

Table 3.23: Analysis of Seton Healthcare Group PLC's Results (£m and number), Year to 28th February 1993 and 1994

Table 3.24: Analysis of Cantab Pharmaceuticals PLC's Results (£m and number), 1993 and 1994

Table 3.25: Analysis of The Boots Company PLC's Results (£m), Year to 31st March 1993-1995

Table 3.26: Analysis of AAH Holdings PLC's Results (£m and number), Year to 31st March 1993 and 1994

Table 3.27: Analysis of Unichem PLC's Results (£m), Year to 31st December 1993 and 1994

Prescribed Pharmaceuticals

INDUSTRY STRUCTURE

PRESCRIPTIONS AND PRESCRIPTION CHARGES

DISTRIBUTION

MARKET SIZE AND FUTURE PROSPECTS

Table 4.1: Number and Net Ingredient Cost of the Major Therapeutic Groups in England (million prescriptions and £m), 1992 and 1993

Table 4.2: Prescription Charges and Ratio of Average Cost (£ and percent), 1984-1995

Table 4.3: Prescriptions in England: Number and Number per Head of Population, 1984-1994

Table 4.4: Prescriptions: Total Net Ingredient Cost (NIC) of Prescriptions and Net Ingredient Cost per Prescription (£m and £), 1984-1994

Table 4.5: Leading Therapeutic Groups by Net Ingredient Cost (£m), 1992 and 1993

Table 4.6: Forecast UK Domestic Market for Prescribed Pharmaceuticals at Constant 1994 Prices (£m), 1994-1998

OTC Pharmaceuticals

INDUSTRY STRUCTURE

MARKET SECTORS

DISTRIBUTION

ADVERTISING

MARKET SIZE

FUTURE PROSPECTS

Table 5.1: Pharmaceutical Products and Ingredients Switched from 'POM' Status to 'P' Status, 1983-1995

Table 5.2: Penetration and Profile of Headache Remedies and Analgesics Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.3: Penetration and Profile of Cough Mixtures Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.4: Penetration and Profile of Cold and Flu Remedies Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.5: Penetration and Profile of Throat Lozenges and Pastilles Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.6: Penetration and Profile of Laxatives and Salts Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.7: Penetration and Profile of Hayfever Remedies Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.8: Penetration and Profile of Rubs and Rheumatism Remedies Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.9: Penetration and Profile of Vitamins, Cod Liver Oil and Other Supplements Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.10: Penetration and Profile of Mouthwashes and Gargles Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.11: Penetration and Profile of Indigestion and Stomach Remedies Usage by Sex, Age and Social Grade (000 and percent), 1994

Table 5.12: Main Media Advertising Expenditure on Major Pharmaceutical Therapies for Non-Prescription Medicines (£000), 1993 and 1994

Table 5.13: Main Media Advertising Expenditure on Major Analgesics (£000), 1993 and 1994

Table 5.14: Main Media Advertising Expenditure on Major Cold Remedies (£000), 1993 and 1994

Table 5.15: Market Size of OTC Pharmaceutical Products by Sector in Pharmacy and Grocery Sectors (£m at rsp), 1993 and 1994

Table 5.16: Market Size and Forecast for OTC Products in the UK (£m at rsp), 1992-1998

Research and Development

STRUCTURE OF RESEARCH

COST OF PRODUCT DEVELOPMENT

TYPE OF RESEARCH

RESEARCH COSTS AND SALES

CONTRACT RESEARCH ORGANISATIONS (CROS)

BIOTECHNOLOGY FUNDING

OTC RESEARCH

Table 6.1: Research and Development Costs of the Major World and UK Pharmaceutical Companies ($m), 1992 and 1993

Table 6.2: Sources of Funding for Biotechnology Companies ( percent), 1994

Key Note Consumer Research

INTRODUCTION

ATTITUDES TO THE PHARMACEUTICAL INDUSTRY

COST OF MEDICATION

ATTITUDES TO PHARMACISTS

PATIENTS' ATTITUDES TO PRESCRIBED MEDICAL TREATMENTS AND ALTERNATIVES

Table 7.1: I Expect Medical Science to Cure Most of My Health Problems ( percent agreeing), 1995

Table 7.2: I Do Not Expect Medical Science to Cure Most of My Health Problems ( percent agreeing), 1995

Table 7.3: The High Price of Prescription Charges Puts Me Off Going to the Doctor ( percent agreeing), 1995

Table 7.4: I Would Be Prepared to Ask the Pharmacist Whether or Not There Was a Cheaper Alternative Prior to Handing in a Prescription ( percent agreeing), 1995

Table 7.5: In the Past, I Have Been Given a Product on Precription Only to Discover Later That It Could Have Been Bought Over-The-Counter at a Cheaper

Price ( percent agreeing), 1995

Table 7.6: I Am Not Aware That My Pharmacist Can Recommend Remedies For Me ( percent agreeing), 1995

Table 7.7: I Would Go To a Pharmacist on Grounds of Convenience/Speed Rather Than a Doctor for Remedies ( percent agreeing), 1995

Table 7.8: I Only Feel a Visit to the Doctor is Worthwhile If I Am Given a Prescription ( percent agreeing), 1995

Table 7.9: I Would Consider Seeking a Natural Alternative to a Prescription Given to Me By My Doctor ( percent agreeing), 1995

Table 7.10: There is Not Enough Information Available About the Possible Side Effects of Pharmaceutical Drugs ( percent agreeing), 1995

Table 7.11: I Prefer to Treat Myself for Minor Illnesses to Consulting a Doctor/Physicist ( percent agreeing), 1995

Table 7.12: I Regularly Take Vitamins and/or Dietary Supplements to Improve My Health ( percent agreeing), 1995

Future Prospects

Table 8.1: Forecast of the Total Market for Prescribed and OTC Pharmaceuticals in the UK (£m), 1994-1998

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

ICC INFORMATION SOURCES

ICC INFORMATION GROUP LTD

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

The pharmaceuticals industry is one of the largest in the world. In the UK, it has been a rare example of continued expansion and success for more than 30 years. This has happened in spite of the fact that the UK market for pharmaceuticals, although in excess of £5.5bn, represents only around 4 percent of the world market.

The industry has grown on the back of a high level of research and development which is constantly leading to new products for an ever growing world population. Consequently, exports are vital to the industry. In 1994, exports accounted for around two-thirds of total UK output with great potential for increasing this further.

The over-the-counter (OTC) sector is much smaller at £1.3bn in the UK, but is expanding faster, at a rate of 6.5 percent in 1994. Research is important here also, but the industry is based on long-standing branded products with low levels of research and generally small profit margins.

The prescribed sector remains probably the most regulated industry of all. In spite of an increase in private healthcare, the National Health Service purchases the vast majority of the UK output. Through the Pharmaceutical Price Regulation Scheme (PPRS) the price paid by the NHS is restricted and has been actually reduced in recent years, by some 2.5 percent.

The fact that the Government has been trying to cut down on the number of medicines available in specific therapies via the Limited List, suggests severe increases. However, the patent life of an ethical pharmaceutical has been effectively increased to 15 years for most products. The Association of British Pharmaceutical Industries (the ABPI), the industry's trade association, has conducted an educational propaganda campaign and there is now a more cordial relationship between the trade and the Government, not necessarily found in other countries.

Following the purchase of Wellcome by Glaxo, the UK now has the largest prescribed pharmaceutical company in the world. This, together with the siting of the European Medicines Evaluation Agency in London, has given the industry a high profile in the UK. It should help to keep the British industry to the forefront of world production.

The industry has proved itself to be recession proof. For this reason company failures have been minimal. Even so, there can be difficulties if a company's research department is not delivering new products and this can happen if a research unit is limited in size. This has led The Boots Company PLC to sell its research operation and for Fison's research to be the centre of some speculation regarding its viability.

Since presumably the easiest medical discoveries have already been made, it suggests that research will prove more expensive in the future. To combat this the industry is looking to greater co-operation between companies while still retaining independence, but cutting costs.

To help profits, many ethical pharmaceutical manufacturers are moving into the OTC market. This has given the healthcare sector a higher profile and extended its membership and range of products. With an OTC version of Zantac, Glaxo's blockbusting anti-ulcer drug, added to Tagamet 100 and Pepcid medicines which themselves were added to the OTC range in 1994, healthcare has also heightened its profile.

The acceleration in the rate of delisting has been reflected in a big increase in advertising expenditure with indigestion remedies consequently being the main target area. The OTC market is now focusing on main media advertising, in particular television.

Growth in both sectors is safely predicted. By the end of the century the UK combined market should be valued in excess of £7bn. The success of the industry will, however, be measured by its export performance. By the year 2000, the UK's trade surplus in prescribed pharmaceuticals should have reached £2bn.

Text © 1995 Key Note

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