The US pharmaceutical market is likely to lose its share in global pharmaceutical market in future as it dropped to about 46% in 2007, says the Standard & Poor’s Ratings Services.
The Standard & Poor’s Ratings Services has disclosed that the pharmaceuticals market of the US is expected to lose its share in the global pharmaceutical market in near future as its share declined from 49% in 2005 and 48% in 2006 to about 46% in 2007, as reported by Forbes.
According to the Ratings Services, the pharmaceutical companies faced decline in sales with slow growth during Q1 2008, especially in the US, as generic drugs are giving strong competition to the patented drugs.
The adoption of strict attitude towards the approval process of new by the FDA (Federal Drug Administration) in last few years is one of the major reasons for drop in sales of pharmaceuticals in the US. Resultantly, many new drugs are either unapproved or are still waiting for approval.
Moreover, slow process of approval, requirement of clinical evidences by regulators, limited claims for newly approved drugs and applications for more “black box” warnings on labels are not only discouraging many pharmaceutical companies of the country from producing drugs already available to patients, but are also increasing risks among them. This had also led to a decline in pharmaceutical sales in the US market in 2007.
Furthermore, the issues of intellectual property are badly affecting the pharmaceuticals patent-holders. Also, compulsory licensing issue, patent law reforms and court’s verdict on matter composition and patent process are affecting the pharmaceutical sales in the US as all these issues are increasing doubts about the basic model supporting the R&D-based pharma companies of the country.
For the year 2008, mixed development can be seen in the credit quality of the pharmaceutical companies, which is based on acquisitions, share buybacks and conservative financial policies adopted by the companies. The adoption of less conservative policies with minimum financial support is likely to make pharmaceutical companies more prone to further erosion.
A Research Analyst at RNCOS said, “Many government rules and regulations are badly affecting the US pharmaceutical market. Thus, to beat the challenges and to avoid the opposite effects of the new regulations, pharmaceutical companies should improve the quality of their drugs.”
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