Pharmaceuticals | Total revenues by division – Q2
The pharmaceutical, chemical and life science businesses of Merck are organized into two business sectors – Pharmaceuticals and Chemicals – each of which consists of two divisions.
The Pharmaceuticals business sector’s divisions are Merck Serono for innovative prescription medicines and Consumer Health Care for over-the-counter pharmaceutical products. The Pharmaceuticals business sector generated 63% of the company’s total revenues during the second quarter. Total revenues for the Pharmaceuticals business sector increased by 2.2% to € 1,598 million during the second quarter and by 2.1% to € 3,142 million in the first half of 2011.
The Pharmaceuticals business sector was affected by inventory adjustments and an array of one-time expenses from the Merck Serono division during the second quarter. Details can be found in the discussion of the division’s performance below. As a result, the Pharmaceuticals business sector’s second-quarter operating result fell to € –137 million in the second quarter from € 158 million in the year-ago quarter. The first-half operating result was € 19 million compared to € 338 million in the year-ago period.
IMS Health, the world’s leading provider of market intelligence for the pharmaceutical and healthcare industries, predicted in its most recent report (May 18, 2011) that global spending for medicines would slow to a compound annual growth rate of 3% to 6% over the next five years. This compares with a 6.2% annual growth over the past five years. Lower levels of spending growth for medicines in the U.S., the ongoing impact of patent expiries in developed markets, continuing strong demand in emerging markets, and policy-driven changes in several countries are among the key factors that will influence future growth, according to IMS Health.