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Following the low growth of the global pharmaceutical market in 2010, IMS Health's IMS Market Prognosis now expects the industry to rebound somewhat in 2011, growing at a rate of 5-7%, compared with only 4-5% in 2010, to reach $880 billion.
Following the low growth of the global pharmaceutical market in 2010, IMS Health’s new report, IMS Market Prognosis, predicts that the industry will rebound somewhat in 2011, growing at a rate of 5–7%, compared with only 4–5% in 2010, to reach $880 billion.
However, it’s not all good news as the underlying constraints to growth, such as the impact of patent expiries and government initiatives to limit drug spending, will be stronger than ever in 2011.
“In 2011, products with sales of more than $30 billion are expected to face the prospect of generic competition in the major developed markets,” explains an IMS press statement. “In the US alone, Lipitor, Plavix, Zyprexa, and Levaquin-which together accounted for more than 93 million prescriptions dispensed in the past 12 months and generated over $17 billion in total sales-likely will lose market exclusivity.”
Data also paint an uncertain picture for 2012-as this is when patent expiries and the shift to lower-cost generic alternatives will have their full impact because of the timing and expected competitive intensity among generic entrants.
2011 and beyond will also see industry coming to terms with reductions in the drug budgets of public and private payers. “Multiple markets will be impacted by these measures in 2011,” said IMS. “Prominent examples include substantial reductions in the price of generics relative to their branded counterparts in Spain and in Canada, where generic pharmacy rebates are expected to be eliminated; new price negotiation requirements for brands launched in Germany; and across-the-board price cuts for branded products in Turkey and Greece.”
Although the future of the developed pharmaceutical markets may still be a little unsteady, it’s a different story for pharmerging countries, which are forecast to grow at a rate of 15–17% in 2011 to reach up to $180 billion. Many of these markets are benefiting from greater government spending on healthcare, as well as greater demand and access to medicines. In particular, China, which is now the world’s third-largest pharmaceutical market, is expected to grow by 25–27% to reach more than $50 billion next year.
In comparison, the predicted growth for developed markets is much lower. Japan is expected to grow 5–7% in 2011 as biennial price cuts are expected to have little impact, but the five major European markets (Germany, France, Italy, Spain, and the UK) will collectively grow at a rate of only 1–3%. Meanwhile, the US is forecast to experience 3–5% growth.
So where does industry go from here? Particularly, the developed markets that seem to have tough times ahead? According to IMS, there is a “promising wave of innovation” and potential for several significant treatment options for stroke prevention, breast cancer, and hepatitis C, among others. Five potential blockbuster products are also expected to be approved and launched globally by the end of next year.
“In 2011, we will see the loss of exclusivity for some iconic brands and a promising new wave of innovation,” Murray Aitken, IMS senior vice-president, said in the press statement. “It also will be a critical year for gauging how healthcare reform initiatives in key markets evolve and play out amid the expected macroeconomic recovery. For pharmaceutical manufacturers, an unrelenting focus on bringing distinct value to patients and health systems will be essential to navigating this dynamic market.”