Healthcare & Pharmaceuticals

Drug Groups Expected to Reap Billions in Sales

Some of the world’s leading pharmaceutical companies are reaping billions of dollars in extra revenue amid global concern about the spread of swine flu. Analysts expect to see a boost in sales from Sanofi-Aventis, GlaxoSmithKline, Roche, and Novartis when the companies report their earnings for 2009, lifted by government contracts and orders from other countries for flu medicines.

Marie-Paule Kieny, director of the WHO's Initiative for Vaccine Research, said that potential global value of the market was estimated at between $10 billion and $20 billion. The potential beneficiaries in 2009 sales would include Sanofi-Aventis, Novartis AG, Roche, GlaxoSmithKline (GSK), Baxter, Commonwealth Serum Laboratories (CSL), and many others across the globe. The market for such vaccines has few global players due to high barriers of entry into the industry. The key drugs for treatment include Roche’s Tamiflu (oseltamivir) and GlaxoSmithKline’s Relenza (zanamivir). Smaller biotech companies could have particular interest in the H1N1 area, with Chinese drug maker Sinovac Biotech Ltd. already reporting that its swine flu vaccine was effective after a single dose.

However, officials are worried, as vaccine supplies could prove tight and sales are expected to provide a windfall for the global pharmaceutical industry. The pharmaceutical industry is expected to post major growth this year from vaccine and anti-viral drugs, despite the global economic downturn. The WHO has formally requested that manufacturers reserve a portion of their future H1N1 vaccine production for low-cost sales to developing countries, in the interests of public health and combating the pandemic.

Marie-Paule Kieny, Director of the WHO's Initiative for Vaccine Research, said that potential global value of the market was estimated at between $10 billion and $20 billion. (Source: Reuters news article dated July 16, 2009)