The American pharmaceutical industry is a highly globalized industry. The industry alone holds almost half of the global pharmaceutical market, with sales of drugs in the country making up 48% of the global market for pharmaceuticals as of 2019.
The U.S. pharma industry has shouldered the responsibility of developing and manufacturing some of the world’s most innovative and best-selling drugs. The drugs produced in the U.S. have been known to tackle a wide array of diseases that were otherwise difficult to treat.
Several companies in the U.S are currently running clinical trials for drugs and vaccines against the novel COVID-19 with the cooperation of the U.S Food and Drug Administration (FDA).
The statistics and facts listed below consolidate the fact that the U.S pharmaceutical industry is indeed the biggest in the world.
The U.S. pharma industry is the largest in the world in drug development and production, revenue generation, advertising, global image, and acceptance. The United States is home to many of the world’s top pharmaceutical companies, with five out of the top 10 -based on revenue – headquartered in the U.S. Even the best-sold drugs in the world both in the past and currently were made in the U.S.
The United States in 2018 was the largest pharmaceutical market, generating about $484.8 billion which represented 40.4% of the $1.2 trillion generated worldwide. This was over $350 billion more than any other country, a fact largely contributed to by the prices of top drugs increased significantly in the U.S between 2009 and 2015. The average spending per person was $1,200 which was the highest pharmaceutical spending per capita in the world.
In 2019, the United States remained the world’s largest single pharmaceutical market, generating more than $490 billion of revenue. Despite being only a 0.2% increase from the previous fiscal year, the United States market accounted for 48 percent of the global pharmaceutical market.
(Source: Pharmaceutical Commerce)
The pharmaceutical market in the United States is on a solid incline. It is projected that by 2023, Americans would spend between $635 and $655 billion on medicine. This represents a solid 29.6 – 33.7% increase in expenditure compared to 2019. This will undoubtedly make it the country with the highest pharmaceutical expenditures.
To show how huge this is, China in second place is estimated to spend $170 billion in the same 2023, which is not up to a third of the expenditure in the U.S.
The contribution of the U.S. pharmaceutical industry is so massive that five (5) of the world’s top ten (10) pharmaceutical companies are headquartered in the U.S. These companies are all multinationals but run their operations around the globe from the U.S.
These top 5 companies include Johnson & Johnson (1st), Pfizer (3rd), Merck & Co. (6th), AbbVie (9th), and Abbott Laboratories (10th). To even get a wider image, according to their 2019 revenue, 15 of the 30 top Pharmaceutical companies of 2019 are also headquartered in the U.S. This shows that a direct half of the top pharmaceutical companies in the world are of U.S origin.
As of 2019 and solely according to revenue generated in that fiscal year, the top pharmaceutical company in the world was Johnson & Johnson. The company made a whopping $82.06 billion in total pharmaceuticals revenue, besting La Roche ($63.85 billion) and Pfizer ($51.75 billion) in second and third places respectively.
Projected earnings at $85.8 billion for 2020 will equally see them maintain this enviable position.
Pharmaceutical companies in the United States spend loads of money to advertise their products. It is unclear if these advertising costs are of a direct impact on the high drug prices in the U.S. or if the high drug prices are the reason so much money is available for advertising.
The direct-to-customer (DTC) advertising costs reviewed from 2012 to 2018 showed that the figures rose from $3.9 billion in 2012 to $6.46 billion in 2018.
(Source: Pharmaceutical Technology)
As the acclaim for biggest in the world remains, the U.S. pharmaceutical companies have been involved in some of the largest ever lawsuits in the pharmaceutical world. Of the top 10 biggest of these suits by settlement amount, U.S. based companies have been involved in 6.
The companies are Pfizer ($2.3 billion in 2009), Johnson & Johnson ($2.2 billion in 2013), Abbott Laboratories ($1.5 billion in 2012), Eli Lilly and Co. ($1.4 billion in 2009), Merck ($950 million in 2011), and Amgen ($762 million in 2007).
The U.S. leads the pack in medical research and development in the global pharmaceutical industry, spending an estimated $60 billion yearly for the purpose. The Research and development expenditures per employee in the U.S pharmaceutical industry are by far higher than in any other manufacturing sector.
Between 2001 and 2015, the yearly research and development (R&D) investment by pharmaceutical companies in the US averaged $165,844 per employee which was almost 12 times more than the average for all manufacturing industries.
The most direct result of this is that as at April 2019, there were roughly 4,500 medicines in the preclinical development phase of the drug pipeline in the U.S., the largest in a single country in the world.
(Source: Policy and Medicine)
The cost of developing a drug in the U.S is very expensive in terms of money and time. The monetary cost has increased from less than $200 million to over $2.6 billion per drug in 2019. The time cost is also massive.
To develop a new innovative medicine in the U.S, initial research is first carried out; clinical trials are then performed by manufacturers before the U.S Food and Drug Administration grants approval.
The entire process may take up to 15 years for a single Cancer drug.
The FDA approved 229 new drugs in the 2001-2010 decade. This comparatively small figure was not because companies were not producing drugs but mostly because the FDA did not have the manpower to handle the demand placed on it at the time. The next decade (2011-2018) saw the figure rise to 309 new drugs and an average of 38 per year.
In 2019 alone, the FDA approved 59 new drugs meaning that the FDA now approves an average of 41 drugs per year, a truly impressive figure.
Adalimumab (Humira by AbbVie) is currently the world’s best-selling drug having made $18.4 billion in 2017, $19.9 billion in 2018, and $19.17 billion in 2019. This drug is used in the treatment of autoimmune diseases, rheumatoid arthritis, Crohn’s disease, and Spondylitis.
Pfizer’s best selling drug, Lipitor (Atorvastatin), is also the best-sold drug in the documented history of drugs in the U.S. The drug sold a total of $94.67 billion between 1992 and 2017.
Lipitor has been efficient in treating high cholesterol and reducing the risk of heart disease, which explains why it did so well in the U.S market. It is yet unclear but it appears AbbVie’s Humira may soon be able to take its crown if it continues on its trajectory.
(Source: U.S Bureau of Labor Statistics)
In 2019, Pharmacists in the United States earned median pay of $128,090 a year or $61.58 per hour. The lowest 10 percent of them earned less than $88,400, and the highest 10 percent earned more than $162,900. This is almost double the wages of other health and diagnosing practitioners at $82,380, while being more than triple the median wage of all occupations at $39,810.
Demand is projected to increase for pharmacists in a variety of healthcare settings, including hospitals and clinics. However, the outlook for the next 10 years is at 0% meaning that the number of jobs projected to be lost within that time frame is almost equal to the number projected to be gained.
(Source: U.S Bureau of Labour Statistics)
The Pharmacy technician in the U.S in 2019 made a median salary of $33,950 per annum or $16.32 per hour. The U.S also boasts over 420,400 technician jobs, a figure which will increase by 7% in 2023 due to increasing demand for pharmacy technicians in the U.S.
(Source: U.S Bureau of Labour Statistics)
The Occupational Employment Statistics of the U.S Bureau of Labor Statistics (BLS) shows that California is the best state for both pharmacists and pharmacy technicians based on combined employment figures and mean salaries in the state. The state employs 32,150 pharmacists and 36,560 pharmacy technicians who earn an average of $144,050 and $45, 200 respectively, more than any other state.