| The global excipients market faces challenges that may also turn out to be significant opportunities, explains Hans Huttinga of Kerry Bioscience – Sheffield Pharma Ingredients
The pharmaceutical excipient market is undergoing a period of intense change, driven by structural alterations in the drug market and the evolution of global business. Many challenges lie ahead, but also many opportunities. There are certainly bullish projections for growth. Frost & Sullivan placed the total European excipients market at $1.13 billion in 2004, and expects to see growth to $1.39 billion by 2008. The world market in 2004 was estimated to be worth around $2.5 billion (1).
This rosy financial future will, however, come at a cost. Over the next few years, excipient manufacturers will have to rise to the challenge of simultaneously servicing two very different markets: one valuing partnership and innovation, the other seeking competitive prices coupled with consistency of supply.
THE BLOCKBUSTERS’ DEMISE
For many years, big pharma companies have relied on ‘blockbuster’ drugs employing patented novel molecules. These were developed to treat the greatest number of people suffering from the most common diseases, and their huge development costs were more than offset by the promise of high sales. At the 2006 Drug Discovery Conference, held in Boston, it was estimated that the cost of producing a successful new drug could now exceed $2 billion (2).
However, with effective patent lives of only around 10 years, increased pressure from HMOs to cut prescription costs, and ever more onerous regulation, blockbusters are increasingly under threat from low-cost generic medication. Cutting Edge Information has estimated that by 2008, over $80 billion worth of blockbusters’ patents will have expired, potentially wiping 80 per cent from established manufacturers’ market share (2). Drug companies are beginning to realise that they must adopt a new business model in which drugs are increasingly marketed to specialist treatment niches, positioned not as ‘me too’ but differentiator products, taking into account consumer preference factors such as appearance, ease of use and novel functionality. |
