Matej Mikulic
Research expert covering health, pharma & medtech
Global pharmaceutical industry - statistics & facts
The global pharmaceutical industry has experienced significant growth during the past two decades, with revenues totaling around 1.6 trillion U.S. dollars in 2023. With growth like that, the industry's size is now comparable to the gross domestic products (GDPs) of countries like Spain, Mexico, or Australia.
All eyes on pharma and biotech
Soon after the COVID-19 pandemic hit the world with full force, it became clear that without new therapies and particularly vaccines, the world would be stuck in a permanent cycle of lockdowns and crises. Consequently, pharmaceutical companies came into the public’s focus, with the pressure to provide results quickly growing. This was especially true for the global leaders of the vaccine market: GSK, Pfizer, Merck & Co., and Sanofi. However, out of these four, only Pfizer managed to develop a widely used, safe, and effective COVID-19 vaccine in cooperation with German biotech company BioNTech, which originally discovered this vaccine. AstraZeneca, previously not a company focused on vaccines, developed a vaccine together with Oxford University.Leading companies and countries
Based on the prescription drugs market, Johnson & Johnson is the world’s leading pharmaceutical company. The company, which has its global headquarters in New Brunswick, New Jersey, generated total revenues of around 85 billion U.S. dollars in 2023. Other top global players from the United States include Pfizer, Merck & Co., and AbbVie. It is no surprise that the U.S. is the largest national pharmaceutical market worldwide. China has become one of the main players in the industry, and the annual growth rates of some emerging pharma markets have been strong in recent years. However, projected pharmaceutical sales show that the established markets of North America and Europe will still be leading the way in the near future.How much do companies spend on R&D?
More than any other industry, the pharmaceutical sector is highly dependent on research and development, with companies investing around 20 percent or more of their sales revenues in R&D projects. This share can be much higher at companies that specialize in research and generate low sales. The discovery of new drugs is vital for the continued growth of pharmaceutical companies, and sales of new branded drugs can provide sizeable contributions to total revenues. However, the loss of patent protection can have serious consequences, and competition from generic drugs is a major challenge for companies. The expiration of a product patent can result in a significant reduction in revenues, as experienced most recently by AbbVie’s Humira.Growing importance and outlook
The COVID-19 pandemic has shown how important a role the pharmaceutical industry can play – when effective cooperation and synchronization with other segments of the health care system are given. The industry stood stable during the pandemic and the economic downturn. In fact, the specific state of emergency during the pandemic forced companies to rethink old processes and introduce, or at least plan, innovations, for example in the field of clinical trials. All this is reflected in positive revenue forecasts, which indicate that the global pharmaceutical industry could reach the two trillion dollar landmark within the next five years.
