Despite the modest size of its population, the value of the Swiss pharmaceutical market reached US$4.74bn in 2007, with the growth rate outperforming the European average for the year. Key driver of this growth has been the launch of innovative products, with the country’s preference and acceptance for novel treatments resulting in the patented segment accounting for over two-thirds of the total market. In the first half of the forecast period, the overall market growth will be steady, but unspectacular. The last two years of the period will witness negative growth, with the value forecast to reach just US$5.17bn, as generic medicines continue to gain popularity.
Consequently, in BMI’s new Business Environment Rankings for Q408, Switzerland has fallen from first - out of the eight key Western European markets - to second. The pole position has been relinquished to Germany, which is supported by strong growth of its prescription market and an increase in Value-Added Tax (VAT) medicines. Globally, however, Switzerland remains one of the best pharmaceutical markets in which to do business, being ranked third out of the 61 pharmaceutical markets surveyed by BMI, behind only the US and Germany.
Local pharmaceutical powerhouses, led by Novartis and Roche, continue to show much dynamism in terms of recent activities. Following the Q208 acquisition of ophthalmic group Alcon and US antibiotic developer Protez Pharmaceuticals, Novartis purchased fellow domestic player and long-standing research partner Speedel. Acquisitions are part of the Swiss company’s efforts to reinforce its innovative pipeline, although its generics arm Sandoz continues to growth from strength to strength, especially in emerging markets. The company recently posted US$3.9bn in H108 sales, an increase of 13% year-onyear (y-o-y).
The key development in the past quarter has, however, been Roche’s offer to buy the remaining shares of US biotechnology giant Genentech. Roche, which already owns a majority share in the US company, intends to strengthen its focus on innovation by sharing technology, expertise and intellectual property. While BMI believes Genentech will be reluctant to accept Roche’s initial bid due to both its desire to stay independent and the low offer by Roche, the deal is likely to be accepted eventually. In the meantime, Roche is looking for further expansion opportunities in the Americas region, with a particular focus on Brazil, mainly in oncology, inflammatory diseases, virology and central nervous system diseases. This shift in geographical focus shortly follows the company’s decision to suspend research into new HIV/AIDS treatments, as none of its current candidate treatments represent significant improvements on existing therapies. Instead, Roche is stepping up its efforts in virology with research into hepatitis C virus (HCV) treatments - the leading cause of complications and mortality in HIV/AIDS patients.
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