Manufacturing costs for the global pharmaceutical manufacturing industry are expected to increase by 8% to 10% in 2020 from 2016 levels, according to a new report from the International Trade Commission (ITC).
The report is a reflection of the rapid global consolidation of the industry as major drugmakers shift from the production of generic drugs to manufacturing pharmaceuticals for patients.
The report comes as pharmaceutical companies are looking to ramp up their production capacity and invest in research and development to make their products more effective and cost-effective.
According to the report, global pharmaceutical-manufactoring costs are expected at $2.0 trillion in 2020, up from $1.4 trillion in 2015.
However, it predicts that pharmaceutical manufacturing will grow at an average of 2% per year through 2020, with the average growth rate of 6% to 7%.
The report states that the industry’s total annual costs will increase by 6.2% from 2020 to 2025, with manufacturing spending on generic drugs, pharmaceuticals and biosimilars forecast to rise by 9.1% from 2019 to 2025.
“Manufacturing costs will be driven by a large increase in the size and scope of global pharmaceutical companies,” the report says.
While manufacturing is projected to grow at a faster rate than the overall pharmaceutical industry, the report predicts that global pharmaceutical costs will rise at a much slower rate.
Pharmaceuticals are currently the largest segment of the global supply chain.
They are the largest component of pharmaceuticals sold to healthcare systems and governments around the world, accounting for roughly 40% of global drug prices.
The report says that global manufacturing costs are projected to rise slightly in 2020 to 2021 from 2021 to 2022, as the US and Europe, with a combined total of more than 40% market share, ramp up production capacity.
However it says that the global manufacturing industry will remain the largest contributor to global healthcare spending in 2020 and 2021.
The study predicts that, in 2020 or 2021, global manufacturing will account for more than two-thirds of global healthcare costs.
Despite this, the manufacturing industry is expected to continue to grow, due to rising costs for developing pharmaceuticals.
However, the ITC says that manufacturing costs for generics will fall, with global manufacturing growth projected to average 2% annually through 2020 and 2.5% in 2021.
In the US, manufacturing costs will average 1.7% annually from 2020 through 2021, and 2% in 2025, the study states.
Manufacturing for generic drugs will increase as the sector grows in the coming years, with production costs expected to average 4.3% annually and 4.5%, in 2025 and 2021 respectively.
Source: The ITC report on Pharmaceutical Manufacturing Costs, 2020-2021