Pharma Market Trends 2010 - Pharmaceutical Technology

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Pharma Market Trends 2010
The authors describe recent market trends and indicate the likely future direction of the pharmaceutical and biopharmaceutical industries. This article is part of the 2010 Outsourcing Resources special issue.

Pharmaceutical Technology
Volume 34, pp. s38-s45

Secondary-care therapy areas become a priority

Historically, small-molecule drugs dominated therapeutic areas such as cardiovascular and central nervous system (CNS) conditions and contributed to significant sales growth. However, these markets are not only saturated with me-too drugs, but also suffer from rapid market erosion because of the influx of generic drugs after the patent expirations of key brands. For example, in 2009, sales of cardiovascular drugs totaled $99 billion; they are forecast to decline at 2.8% CAGR (2009–2014). The forecast contraction in this market is likely the reason for Pfizer's announcement in September 2008 that the company was ending its research and development (R&D) investment in this therapy area—a landmark move, given the dominance of cardiovascular drugs in Pfizer's portfolio.

Now pharmaceutical companies are shifting their R&D focus toward developing novel—often biologic—therapies for the treatment of niche indications, which should ensure longer-term growth given biosimilars' minimal impact to date. Examples of target therapy areas are oncology, immunology and inflammation, and endocrine diseases, which are forecast to grow at rates of 5.9%, 4.0%, and 6.3% CAGR, respectively, between 2009 and 2014.

In 2009, several noteworthy therapies were launched, representing truly novel drugs that target unmet needs. Johnson & Johnson's (New Brunswick, NJ) Stelara (ustekinumab) for plaque psoriasis stands out as a first-in-class agent with efficacy superior to that of traditional therapies. Also, Takeda's (Osaka) Uloric (febuxostat) is the first new treatment for gout in 40 years, and Forest's (New York) Savella (milnacipran) is the first drug indicated solely for fibromyalgia (1).

Table II: Combined global prescription sales for the top 50 pharmaceutical companies (excluding generic-drug companies) by therapeutic area (2009–2014).
In addition, these target markets—oncology, endocrinology, and immunology and inflammation—will experience the highest sales growth and become the principal growth drivers for the top 50 pharmaceutical companies (excluding generic-drug companies), collectively generating an additional $45 billion by 2014. It is therefore expected that an increasing number of companies will focus on these more profitable markets (see Table II).

Factors driving the shift away from the primary-care model

Figure 1: Factors inspiring the shift away from the primary-care blockbuster model toward niche indications. (ALL FIGURE ARE COURTESY OF DATAMONITOR GROUP)
With cash-strapped payers now scrutinizing drugs' costs and clinical benefits, it is not surprising that the pharmaceutical industry is now focused on biologic therapies in secondary care and niche markets (5). Additional factors that attract pharmaceutical companies toward niche indications include the faster and cheaper R&D process that results from the smaller patient populations and clinical-trial sizes. In addition, several regulatory agencies provide incentives and subsidize R&D in the development of orphan drugs. The agencies offer tax credits, regulatory assistance, and accelerated approval. Also, one of the largest cost-saving factors for companies with a niche product is that large-scale patient and physician marketing through various channels is largely irrelevant. In fact, annual average marketing costs for an orphan drug are seven times lower than those for nonorphan products. Figure 1 summarizes the factors inspiring the shift away from the primary-care blockbuster model toward niche indications.


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