The increasing prevalence of chronic diseases is the prime mover of the demand for biologics, ensuring that the market growth redoubles over the forecast period. The global biologics market was pegged at US$192.2 bn in 2015. It is slated to exhibit substantial growth, expanding with a stout CAGR of 10.9% between 2015 and 2024. By the end of 2024, the market for biologics is projected to secure US$ 479.7 bn.
Some of the major companies operating in the global market for biologics are F. Hoffmann-La Roche Ltd, Novartis AG, Eli Lilly and Company, Novartis AG, AbbVie Inc., GlaxoSmithKline Plc., Merck & Co., Inc., Amgen Inc, Johnson & Johnson Services, Inc., AstraZeneca, Sanofi, and Pfizer Inc.
Product Approvals, Profitable Returns to Upswing Expansion
With a view to expand their product portfolios, several pharmaceutical companies have been amping up their production capacities. The research and development initiatives of companies are drawing in vast amounts of investments, aiding the process of product development. As several new products are increasingly approved by the regulatory bodies, the drug companies are drawing in more profits through increased margins that range between 20% and 40%. Consequently, the global market for biologics is likely to gain much.
On the other hand, the expansion of the market might be interrupted by high initial capital investments. The investment required for R&D activities directed at developing new biologics is quite high when compared with traditional drugs. It might take as long as 9 years and around $1bn to launch a new biologics product. Moreover, by far only bio pharmaceutical companies have been able to invest such large amounts of time and money, thereby restricting the entry of moderate and small sized firms.
However, a plethora of opportunities is likely to surface as various pharmaceutical companies set up integrated manufacturing units for boosting the volume of production within shorter periods of time. For instance, in the interest of backing up new therapies within the pipeline and simultaneously extending its manufacturing capacities, AbbVie Inc. started a manufacturing unit in Sligo, Ireland. Also, Amgen Inc. launched its biomanufacturing unit in Singapore.
Favorable Reimbursement Policies to Bolster Growth in Latin America
Asia Pacific is likely to come to the fore, displaying the qualities of the most attractive market at the moment. The biologics market in Asia Pacific is slated to occupy one third of the total shares of the global biologics market, expanding at a promising CAGR of 15.6% during the forecast period 2015-2024. The phenomenal growth in this region can be attributed to the entrance of multi-national pharmaceutical companies such as Aventis Pasteur, GlaxoSmithKline (GSK), and Merck and Co. in the Chinese biologics market. Regulatory policies across Asia Pacific are enticing numerous foreign investors, aiding the expansion of the market.
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Besides Asia Pacific, Latin America and the Middle East and Africa present a vast potential. Though in its nascent stage, the market in Latin America is a promising arena in the global biologics market, driven by the growth of Brazil and Mexico. Several companies in Latin America have been regulating reimbursement policies, providing vast coverage for chronic diseases. Therefore, the market for biologics in this region is likely to flourish by degrees.