Executive Summary

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EXECUTIVE SUMMARY

The UK market for prescribed pharmaceuticals was valued at £4.75bn in 1995, and was estimated to be worth £5.32bn in 1996. This market is dominated by the National Health Service (NHS), with private prescriptions accounting for only around 2 percent of the market.
The total pharmaceuticals market is divided into two categories, these being prescription-only medicine (POM) products and over-the-counter (OTC) pharmaceuticals. Prescribed pharmaceuticals can only be obtained with a doctor's prescription. The market for prescribed pharmaceuticals can be segmented according to the category of therapeutic usage, occupied by a product. By value, the largest of these sectors is comprised of products acting on the cardiovascular system.
A number of diverse factors impact on the performance of the prescribed pharmaceuticals market. Among the most important of these is Government policy on healthcare, and the level of public funding on this sector of the NHS. In recent years, the Government has implemented a number of initiatives, aimed at reducing NHS expenditure on pharmaceuticals.
Expenditure on research also plays an important role in the industry's performance. The UK-based pharmaceutical industry is at the forefront of such research, spending £2bn per year on research and development. In proportion to the industry's overall turnover, expenditure on research and development (R&D) was equivalent to 16.8 percent of gross output in 1995. Barriers to entry are high, due to the costs of R&D.
During the mid-1990s, the market has seen a period of intense corporate activity, in terms of mergers and acquisitions. The most important of these was Glaxo PLC's purchase of Wellcome PLC for £9.1bn in 1995. The formation of Glaxo Wellcome PLC created the world's largest pharmaceutical company. Glaxo Wellcome leads the pharmaceuticals market in five of the major global markets -- the US, the UK, Spain, Australia and the Netherlands.
Future Government policy on healthcare expenditure is difficult to predict, until after the forthcoming General Election. If no further major reforms are made to public expenditure on the NHS, the prescribed pharmaceuticals market is predicted to perform well in the foreseeable future.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

GENERIC AND PATENTED PRODUCTS

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: Gross Output of the UK Pharmaceutical IndustryÅ (£m at msp), 1980-1996

Table 2: UK Average Weekly Household Expenditure on Healthcare Products and Services (£), 1994/1995

Table 3: UK Sources of Expenditure on Pharmaceutical Research and Development ( percent), 1995

Market Size

THE TOTAL MARKET

MARKET SECTORS

FOREIGN TRADE

Table 4: The UK Market for Prescribed PharmaceuticalsÅ (£m at msp), 1980-1996

Table 5: Net Ingredient Cost of Prescriptions Dispensed by Family Health ServicesÅ (£m), 1990-1996

Table 6: Proportion of Prescriptions ChargeableÅ ( percent), 1984/1985-1995/1996

Table 7: Leading Therapeutic Groups of Prescribed Pharmaceuticals Dispensed by the FHS by Net Ingredient CostÅ (£m), 1994-1996

Table 8: Leading Therapeutic Groups of Prescribed Pharmaceuticals Dispensed in the FHSA by Number of Prescription ItemsÅ (million), 1994-1996

Table 9: Leading Therapeutic Groups of Prescribed Pharmaceuticals Dispensed in the FHSA by Net Ingredient Costs per Prescription ItemÅ (£), 1994-1996

Table 10: Leading Drug Groups of Prescribed Pharmaceuticals Dispensed in the FHSA by Net Ingredient CostÅ (£m), 1994 and 1995

Table 11: UK Pharmaceutical Industry: Gross Output, Exports and ImportsÅ (£m at msp), 1980-1995

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

DISTRIBUTION

EMPLOYMENT

TRADE ASSOCIATIONS

Table 12: Prescribed Pharmaceuticals Delisted to OTC Status, 1983-1996

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS AND THEIR BRANDS

ADVERTISING AND PROMOTION

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

ILLNESSES SUFFERED

Table 13: Medical Complaints Suffered by Adults Within Last 12 Months ( percent of all adults), 1996

Table 14: Medical Complaints Suffered by Adults Within Last 4 Weeks ( percent of all adults), 1996

Table 15: Person Consulted For a Suitable Remedy to Treat Complaints ( percent of all adults), 1996

Outside Suppliers to the Industry

PHARMACEUTICAL WHOLESALERS

GEHE AG

UNICHEM PLC

THE BOOTS COMPANY PLC

Current Issues

PRODIGY - A COMPUTERISED DECISION SUPPORT SYSTEM

GOVERNMENT LEGISLATION

THE GENERAL ELECTION

DEMOGRAPHIC INFLUENCES

ABPI VOLUNTARY SCHEME

DIRECTIVE ON THE PATENTING OF BIOTECHNOLOGY INVENTIONS

NURSE PRESCRIBING

PRESCRIPTION FRAUD

Forecasts

RESEARCH AND DEVELOPMENT

IMPACT OF THE OVER-THE-COUNTER (OTC) PHARMACEUTICAL SECTOR

FORECASTS 1997-2001

Table 16: Forecast Size of the Prescribed Pharmaceuticals MarketÅ (£m at msp), 1997-2001

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1997 Key Note

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