Pharmaceutical Balance Of Trade

The value of US pharmaceutical exports rose 73% to $5.7 billion between 1989 and 1993, says a new report published by the US International Trade Commission which covers imports and exports of all medicinal chemicals except antibiotics.

The industry's balance of trade grew to $793 million in 1993 from $248 million in 1989, says the study, and the share of total medicinal consumption in the USA represented by imports dropped from 10.3% in 1992 to 9.9% in 1993. Nevertheless, during 1989-1993 imports rose in value by 61%, from $3 billion to $4.9 billion, largely because of increased related-party trade given that the majority of the industry is multinational, and many newer drugs have patent protection in the USA.

Also, as a result of multinationals' reluctance to duplicate the capital expenditure needed to bring on-stream multiple production facilities, and their wish to meet the needs of local markets, many firms with production facilities overseas transfer bulk active ingredients to the USA for formulation. "This trend has been reflected in the increasing numbers of temporary duty suspensions sought by companies for individual bulk active ingredients that are not produced domestically," says the study.