The economics of innovation and access
World sales of pharmaceuticals are very highly skewed to
developed world markets. Table 1.4 indicates that developing
countries, accounting for more than 80% of the world's
population, are responsible for only about 10% of global
sales. However, it should be noted that in terms of volume,
the share of developing countries could be significantly
higher because average prices of pharmaceuticals tend to be
lower in developing than developed countries.
Nevertheless, the overall picture demonstrates very clearly
the extreme differences in access to health-care products
between developed and developing countries. It is helpful to
consider the issues raised from two perspectives:
lack of effective demand for products; and lack of supply.
TABLE 1.4 WORLD PHARMACEUTICAL MARKET BY REGION (US$ BILLION,EX-MANUFACTURER PRICES)
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REGION 2004 2005 GLOBAL SHARE OF SALES 2005(%)
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North America 249.0 268.8 44.4
Europe 169.2 180.4 29.8
Japan 66.1 69.3 11.4
Oceania 7.1 7.7 1.3
CIS(a) 4.2 5.0 0.8
South-east Asia 25.3 28.8 4.6
Latin America 24.4 26.6 4.4
Indian subcontinent 6.6 7.2 1.2
Africa 6.3 6.7 1.1
Middle East 4.7 4.9 0.8
Total world market 562.9 605.4 100.0
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(a) Commonwealth of Independent States.
Source: Market Prognosis, provided to us by IMS Health (compilation of regional and country level statistics).