This finding is having negative knock-on effects as European regulations on healthcare spending are increasing resistance of pharmaceutical companies to consume more laboratory analytical instruments.
"Europeans pay up to 60 per cent less on prescription drugs than Americans and with the US pharmaceuticals market contributing almost 62 per cent of revenue for prescription drugs," said Navin Kumar, Frost & Sullivan's research analyst.
"European pharmaceutical companies are increasingly setting up research and development centres in US," he added.
New analysis from Frost & Sullivan's latest report: "World Laboratory Analytical Instrumentation Markets," reveals that revenues in this market totalled $7.78 billion (€6.5 billion) in 2004 and is projected to reach $10.86 billion in 2011.
Protein research is driving the market for mass spectrophotometer; nuclear magnetic resonance (NMR) spectrophotometers have been increasingly purchased recently due to increased research in proteomics, metabonomics and drug discovery.
But NMR spectrophotometers sales growth rate largely depends on government spending.
However, a challenge to laboratory analytical instrumentation manufacturers is the customer trend of demanding more product features at lesser prices.
End-users expect better sensitivity, increased speed of analysis and ease of operation from these instruments.
Due to increased costs of raw materials, instruments at reduced prices with more features curb the profit margins of manufacturers.
The report details the promise of Europe, whose population dwarfs that of the US. Thus the potential for the laboratory analytical instrumentation market is immense.
The challenge here however, is to maintain profitability at a steady growth rate.