IMS Health, the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries, has projected a growth of 5-7 per cent in global pharmaceutical market in 2011 to US$ 880 billion, compared with a 4-5 per cent pace this year. The forecast, included in the latest release of 'IMS Market Prognosis', is the leading annual industry indicator of market dynamics and therapy performance.
Murray Aitken, senior vice president of IMS, said, “While the overall market will appear to rebound somewhat in 2011, the underlying constraints to growth in developed markets are stronger than ever – including the impact of major patent expiries and payer mechanisms to limit drug spending. We expect the pharmerging markets to continue their rapid expansion next year and remain strong sources of growth, and also see the potential for several significant innovative treatment options that are becoming available for patients in areas that include metastatic melanoma, multiple sclerosis and acute coronary syndrome.”
The IMS forecast covers all types of pharmaceuticals and takes into account macroeconomic conditions, changing levels of patient access, availability of drug treatment options, and pricing factors. Pricing is evaluated at the ex-manufacturer level, but excludes off-invoice discounts and rebates that are part of prevailing practices in certain major markets. Growth rates are expressed in constant dollars to avoid the impact of currency exchange rates.
In its latest analysis, IMS identifies that divergent growth rates expected for developed and pharmerging markets. The pharmerging markets are China, Brazil, Russia, India, Mexico, Turkey, Venezuela, Poland, Argentina, Indonesia, Ukraine, Thailand, South Africa, Egypt, Romania, Pakistan and Vietnam. As countries recover from the global economic crisis at different rates, there is growing divergence in the pace of pharmaceutical growth among major markets. The 17 pharmerging countries are forecast to grow at a 15-17 per cent rate in 2011, to US$ 170-180 billion. Many of these markets are benefiting from greater government spending on healthcare and broader public and private healthcare funding, which is driving greater demand and access to medicines.
China, which is predicted to grow 25-27 per cent to more than US$ 50 billion next year, is now the world’s third-largest pharmaceutical market. Among major developed countries, Japan is forecast to grow 5-7 per cent in 2011, a year when biennial price cuts will have little impact. The five major European markets (Germany, France, Italy, Spain, and the UK) collectively will grow at a 1-3 per cent pace, as will Canada. The US will remain the single largest pharmaceutical market, with 3-5 per cent growth expected next year. Pharmaceutical sales in the US will reach US$ 320- US$ 330 billion, up from US$ 310 billion forecast for this year, not including the impact of off-invoice discounts or rebates.
Peak years of patent expiries shift major therapies to generic dominance. In 2011, products with sales of more than US$ 30 billion are expected to face the prospect of generic competition in the major developed markets. 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 US$ 17 billion in total sales – likely will lose market exclusivity. The full impact of patients shifting to lower-cost generic alternatives for these products, as well as other brands in their therapy classes, mostly will be felt in 2012, due to the timing and expected competitive intensity among generic entrants.
Broad measures applied by public and private payers to reduce growth in drug budgets. Governments are pursuing an ongoing wave of budgetary control mechanisms that target drug spending as one way to restore fiscal balance. Multiple markets will be impacted by these measures in 2011. 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. In the US, health plans are stepping up their use of pre-authorizations and cost sharing provisions in an effort to address rising healthcare expenditures.
Therapy area growth dynamics driven by innovation cycle and areas of unmet need. In 2011, the introduction and uptake of new drugs – a third of which are specialty pharmaceutical products – are poised to fulfil patients’ unmet needs and significantly alter treatment paradigms in several key therapy areas. These include innovative treatment options for stroke prevention, melanoma, multiple sclerosis, breast cancer and hepatitis C. As these new drugs are brought to market, patient access is expected to expand and funding redirected from other areas where lower-cost generics are available. Five potential blockbuster products – defined as those exceeding US$ 1 billion annually in peak sales – are 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. It also will be a critical year for gaging 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,” Aitken added.
Based on an evaluation of key events affecting the marketplace, IMS Market Prognosis provides a forecast at the country, regional and global level. The scope of coverage includes 42 in-depth country analyses and more than 220 top-line country forecasts in 11 regions worldwide.
The forecasts take account of key issues impacting the pharmaceutical and healthcare industries. Additional factors that may affect overall growth include major safety events resulting in product withdrawal or prescribing restrictions; shifts in regulatory approval standards from their current levels; the application of sudden cuts to drug spending levels; public health crises; and a deterioration in economic conditions.
Growth is measured in constant dollars to avoid the influence of currency exchange rates; sales are calculated at the ex-manufacturer level. Market size forecasts are expressed in current dollars, but exclude off-invoice discounts and rebates that are part of prevailing practices in certain major markets. IMS Market Prognosis forecasts use an econometric model that includes forecasts for economic indicators such as Gross Domestic Product, Consumer Expenditure, and the Consumer Price Index from the Economist Intelligence Unit. As the basis for the forecast model and changes in these indicators will impact forecast.