Thursday, May 5, 2011

Top Pharmaceutical Manufacturers of Animal Health Products by Market Capitalization

Recently, the livestock industry has campaigned that antibiotics added to feed save greenhouse emissions because less grain input is required, making more efficient production of meat. Also, this week, Jason Henderson, Kansas City Federal Reserve banker, has proposed that the BRIC nations will be achieving our efficiency in livestock production which would also imply greater use of antibiotics in worldwide production. This next chart and paragraphs are from Choices and the Agricultural & Applied Economics Association listing the top pharmaceutical manufacturers of animal health products and the company revenues.


Pharmaceutical firms are quite large, with the top four firms having between $30 and $50 billon in total revenues. Even though the pharmaceutical industry is often characterized as “big pharma”, it is actually quite fractionalized. The 2007 U.S. Census of Manufacturing reports that there are over 1,500 pharmaceutical and medicine manufacturing firms in the United States. (NAICS code #32541).

Leaving out King Pharmaceuticals, which only has U.S. operations and is now part of Pfizer, the U.S. share of total revenue of the multi-nationals is about 41%. The U.S. Census of Manufacturing reports total U.S. pharmaceutical manufacturers revenue as $188.53 billion. Based on this total U.S. revenue and the top four firms’ U.S. revenues, the Herfindahl-Hirschman Index of market concentration is calculated as 215.81. Industries with an HHI below 1,000 are considered “competitive” industries by the U.S. Department of Justice.

The same report shows that there are over 100 firms in the United States that have over $100,000 in sales of veterinary medicines, biolgicals/vaccines, and medicinal botanicals. This includes those products used for pets and production animals and some of these firms are in both markets. The animal health division revenue share of the firms’ total revenue ranges from about 2% to 6% percent for the major manufacturers. This is not a precise estimate because in some cases the animal health segment is commingled with other products such as over-the-counter consumer products.

The 2007 U.S. Census of Manufacturing reports that total U.S. revenues from veterinary pharmaceuticals are over $5.41 billion. Animal health revenue in (the above table) is greater than this because it includes global sales. No information was found on the firms’ respective U.S. share of sales and so an HHI calculation on the animal health share of the pharmaceutical industry is not possible.

source: Choices and the Agricultural & Applied Economics Association

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