An optimistic job outlook, Rx-to-OTC switches, and upbeat packaging sales predictions offer promise for healthcare product packagers.
Johnson & Johnson’s early-November announcement that its restructuring initiatives would eliminate 6% to 7% of its 117,000 global workforce makes it easy to doubt that the recession is over. The overall employment picture in the life sciences/healthcare industries is uneven, yet sales forecasts from market research firms such as Pira, BCC Research, Freedonia, and Euromonitor provide a beacon of hope for packagers of healthcare-related products.
Healthcare reform, industry consolidation, and H1N1 vaccine availability dominated the headlines during the past year. As the calendar turns to 2010, packagers of healthcare products will continue to operate in an environment of economic concerns, patent protection issues, and an evolving regulatory landscape.
“The continuing high price of medicines in the U.S. has major implications for the distribution system as price-conscious individuals and employers seek strategies to obtain cheaper products,” notes Dr. Faiz Kermani, author of “Pharmaceutical Distribution in the U.S.—Current and Future Perspectives,” from URCH Publishing, publisher of market intelligence reports covering the global pharmaceutical and healthcare industry.
Among the findings of the report:
• In 2008, the U.S. pharmaceutical wholesale market was worth $275 billion.
• McKesson, AmerisourceBergen, and Cardinal Health, Inc., known as the “Big Three,” account for between 90% to 95% of revenue within the U.S. pharmaceutical wholesale sector.
• The Big Three have been responsible for more than 100 buyouts since 1980, at least 57 of which have occurred over the past decade.
• It is estimated that U.S. chain drugstores currently account for 41% of all prescription sales, with the dominant players being Walgreens and CVS Caremark.
• A change from wholesale to direct distribution in the U.S. is unlikely. A U.S.-wide direct distribution model would cost the pharmaceutical industry $47.9 billion to operate. This would represent a 15.5% increase in current distribution costs.
