Growth in the US pharmaceutical sales is expected to remain sluggish during 2009 on account of low rate of approval from FDA and deepening recession.
During the Annual Conference on Industry and Technology Issues of American Society for Automation in Pharmacy, held in St. Petersburg, Florida, a new research has revealed that pharmaceutical sales in the US are expected to grow only 1.3% in 2009 owing to downturn in the US economy and government regulations.
At the end of September 2008, the US pharmaceutical sales generated approx $297 Billion in revenue, 1.3% up from September 2007, according to “National Sales Perspective” from IMS. In 2007, the sales growth rate slowed down to 3.7%, the slowest rate since 1961. The sales of generic drugs in the US, representing 42% of the global sales, declined 2.7% to $33 Billion in the year ended September 2008.
The gloomy outlook for the US pharmaceutical market in 2009 is based on several problems relating to the weak economy and lower rate of drugs approval by FDA (Food and Drug Administration). Further, the confusion among patients about the warning labels, and high FDA safety requirements are severely hitting sales.
In addition, “$4 generic programs” initiated by the retailers have shrunken the gross profit margins. These programs have significantly reduced the profit margins of grocery chains, forcing some of them to re-evaluate their generic programs. Earlier, pharmacy in the supermarket was considered as no-brainer, but the scenario has changed and supermarkets are giving a second look at their values.
Moreover, employment conditions in the US are very bad and the medical representatives’ prospects are particularly bleak. Employment conditions in the market are likely to remain grim as drug manufacturers are laying off their sales staff by another 20%. For instance, sales representatives at Pfizer Inc. are feared of losing their jobs as it planned to cut down the sales force by nearly one-third (around 2,400), according to a recent news reports.
According to a Research Analyst at RNCOS, “Drug sales in the US have been growing at a slower rate in the recent past owing to declining demand and aggressive competition among manufacturers to launch cheaper drugs. With prospects of further deepening of recession in 2009, downward trend is likely to continue until the economy turns around a bit.”
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