Analysts at global accounting firm Ernst & Young estimate global biotech industry revenues for publicly-held companies at $80.6 billion for 2010, up slightly from $79.1 billion for 2009. The firm also estimates that revenues of publicly-held biotech companies in the U.S. increased to $$61.6 billion in 2010, from $56.6 billion the previous year.

Genetically-engineered drugs, or “biotech” drugs, represent an estimated 9% of the total global prescription drugs market, and about 19% of the U.S. prescription market. The U.S. Centers for Medicare & Medicaid Services (CMS) forecast called for prescription drug purchases in the U.S. to total about $274.5 billion during 2011, representing about $878 per capita. That projected total is up from $200 billion in 2005 and a mere $40 billion in 1990.

Estimates of the size of the drugs market vary by source. Analysts at the widely respected firm IMS Health forecast that the global prescription pharmaceuticals market would be $880 billion during 2011. The firm estimated U.S. domestic prescription drug sales at $320 to $330 billion for 2011, representing about 3% growth over the previous year. By 2019, American drug purchases may reach $457 billion or more, according to the CMS, thanks to a rapidly aging U.S. population, increased access to insurance and the continued introduction of expensive new drugs.

IMS Health estimated that global drug sales will reach $1 trillion for the first time in 2014, a growth of nearly $300 billion over five years. (See www.imshealth.com.)

Advanced generations of drugs developed through biotechnology continue to enter the marketplace. The results may be very promising for patients, as a technology tipping point of medical care is approaching, where drugs that target specific genes and proteins may eventually become widespread. However, it continues to become more difficult and more expensive to introduce a new drug in the U.S. For example, during 2010, the Food and Drug Administration (FDA) approved only six new biologics (new biotechnology-based drugs, based on living organisms, that have never been marketed in the U.S. in any form). This number has been trending upward, although unsteadily, since 2004. Meanwhile, in 2010, a total of only 21 new molecular entities or “NMEs” were approved, including six biotech drugs (NMEs are medications containing chemical compounds that have never before been approved for marketing in the U.S.). This number has been trending downward dramatically since the 53 NMEs approved during 1996. The number of new applications for approval has dropped as well, from 45 in 1996 to 23 in 2010.

These NMEs and biologics are novel new active substances that are categorized differently from “NDAs” or New Drug Applications. NDAs may seek approval for drugs based on combinations of substances that have been approved in the past. Also, a large number of generic drug applications are being approved each year. That is, an application to manufacture a drug that was created as a brand name at another firm, and has now lost its patent so that competing firms may seek FDA approval to manufacture it.