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U.S. DRUG SHIPMENTS TO INCREASE 5% IN CONSTANT DOLLARS IN 1993 -- COMMERCE

Executive Summary

U.S. drug shipments will increase 5% in constant dollars in 1993, double the inflation-adjusted growth rate for 1992, the Commerce Department estimates in its U.S. Industrial Outlook 1993. Drug shipments in 1992 increased 8.5% to $64.1 bil., but were up 2.5% measured in constant dollars. Commerce attributed the 5% growth rate anticipated for 1993 to "the large number of blockbuster drugs launched during 1992, and the growing demand from older Americans for new chronic care medicines." The drug market is expected "to continue to expand over the next five years," Commerce continued, "but will face increasing pressure to control prices." International trade "is expected to maintain current levels" in 1993, Commerce said, "despite obstacles such as lack of protection for intellectual property still prevalent in some countries, shortage of hard currency to pay for imports in many developing and East European countries, and lack of a delivery system to the populace in the newly independent states of the former Soviet Union." Drug exports in 1992 totaled almost $6.8 bil., rising approximately 18% above 1991. Imports reached almost $5.5 bil., up 14%, for a U.S. drug trade surplus of $1.3 bil. Commerce reported, however, that "foreign investment in the United States pharmaceutical industry subsided this year after peaking in the late 1980s with large investments by Western European firms." In 1991 and 1992, the U.K., France and Switzerland continued to be "the principal sources of foreign investment." Commerce added that Western Europe and Japan remain the first- and second-largest pharmaceutical customers of the U.S., respectively. In terms of R&D, the drug industry increased spending by 13% to about $11 bil. in 1992. R&D expenditures represented 16% of pharmaceutical industry sales for the year, "one of the highest proportions of any U.S. industry," Commerce pointed out. In the biotech area, shipments were expected to top $4 bil. through the end of 1992, with medicines and diagnostics accounting for over 90% of sales. Biotechnology-derived product sales totaled $3.1 bil. in 1991 and $2.2 bil. in 1990.
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