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

Looking forward

For the foreseeable future, blockbuster drugs will provide the bulk of sales for the top 50 pharmaceutical companies (excluding generic-drug companies). These drugs generated $344 billion collectively in 2008, representing 66% of prescription sales. However, the outlook for these drugs is less than stellar; 66 drugs with blockbuster status in 2010 will see a sales decline of more than $200 million by 2014, in response to me-too and direct or indirect generic competition. As a result, total forecast sales for blockbusters will decline by 2.1% CAGR from 2009 to 2014. Pfizer will be the hardest hit, with 2014 blockbuster drugs sales forecast to decline by $8.3 billion versus its 2009 level. The Wyeth merger will soften the blow slightly for Pfizer, but the company will remain the most strongly affected in terms of blockbuster expirations and total sales losses over the 2009–2014 period. Bristol-Myers Squibb and sanofi-aventis are also forecast to experience losses of $5.0 billion in blockbuster-drug sales by 2014 versus 2009 because of the generic erosion of blockbuster brands.

As the industry moves away from the old primary-care blockbuster model toward targeting specialty secondary-care indications, several novel drugs launched in 2009 still have the potential for blockbuster status, including sanofi-aventis's antiarrhythmia agent Multaq (dronedarone), Johnson & Johnson's Simponi (golimumab) indicated for rheumatoid arthritis, and Bristol-Myers Squibb and AstraZeneca's Onglyza (saxagliptin) for the treatment of type 2 diabetes. Nevertheless, entering a multibillion-dollar therapy area cannot guarantee blockbuster status, particularly in today's price-conscious environment.

Key factors that will be important for determining blockbuster success within the biologic markets include the ability to gain first-mover advantage within a given indication, the subsequent horizontal expansion across disease stages and indications, and the creation of high barriers to competition through the accumulation of clinical safety and efficacy data. In addition, with the increasing cost pressures facing payers, manufacturers will need to demonstrate comprehensive pharmacoeconomic data and drug benefits for these therapies in relation to the disease frequency and severity. They may also need to demonstrate an advantage in comparative effectiveness over existing products. This competitive advantage may be achieved best through coupling drugs with companion diagnostics or creating disease-management solutions. Pharmaceutical companies frequently employ risk-sharing agreements as a means of securing a place on reimbursement lists, thus sharing the risk between the payer and the manufacturer. These schemes also encourage responsible prescribing by healthcare professionals and ensure that resources are not wasted on ineffective treatments. By addressing payer concerns regarding both economic and clinical outcomes, risk-sharing schemes have the potential to change the pricing landscape of high-cost drugs.

These very factors have led to the dominance of mAb products such as Roche's Avastin (bevacizumab), Herceptin (trastuzumab), and MabThera (rituximab); Abbott's Humira (adalimumab); and Johnson & Johnson and Merck & Co's Remicade (infliximab), which together accrued a 72% share of mAb sales in 2008. However, the market share of these top five brands will fall to 57% in 2014 because of increasing competition from newly launched mAbs. In fact, from 2008 to 2014, the number of mAbs achieving blockbuster status will increase from five to 15. Nine other mAbs will generate sales of more than $500 million in 2014. Overall, the mAbs market will remain healthy.

Clearly, a paradigm shift is taking place in the pharmaceutical industry, as the small-molecule business model that historically inspired sales growth is replaced by a high-value specialty-biologics model to fend off further sales erosion. As the patent cliff approaches, it will be increasingly important for all pharmaceutical companies to consider putting a biologics strategy in place, either through organic means or through partnerships, to avoid being left behind in this dynamic, competitive environment.

Bornadata Bain, PhD,* is vice-president and global director of research and analysis, healthcare, and John Shortmoor is head of company analysis, both at Datamonitor Group, 265 Franklin St., 4th floor, Boston, MA 02110, tel. 617.722.4606, fax 617.523.6993,
.

*To whom all correspondence should be addressed.

References

1. R. Whitman, "Pharmaceutical Company Outlook to 2014," (DMHC2591, Datamonitor, London, December 2009).

2. B. Silverman, FDC Rep. Drugs. Cosmet. 72 (3), 3–8 (2010).

3. Tufts Center for the Study of Drug Development, "US Orphan Product Designations More Than Doubled from 2000–02 to 2006–08," Impact Report 12 (1), (2010).

4. J. Smith, Euro Pharma Today, http://www.europharmatoday.com/2010/01/emea-after-highest-year-for-orphan-drug-designations-recommends-four-more-.html, accessed June 21, 2010.

5. M. Musciacco et al., "Pharmaceutical Key Trends 2010" (DMHC2599, Datamonitor, London, March 2010).


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