IMS Health, the world's leading provider of market intelligence to the pharmaceutical and healthcare industries, projected global pharmaceutical market growth of 5-6 per cent for 2007, compared with 6-7 per cent in 2006, as the market continues to rebalance in light of changing market dynamics. According to IMS's 2007 Pharmaceutical Market Forecast, global pharmaceutical sales will expand to US$ 665-685 billion next year.

Murray Aitken, senior vice president, corporate strategy, IMS, said, "In 2007, the market still will be absorbing changes that have defined a new economic reality, one in which growth is shifting from mature markets to emerging ones; new product adoption is not keeping pace with the loss of patent protection by established products; specialty and niche products are playing a larger role; and regulators, payers and consumers are more carefully weighing the risk/benefit factors of pharmaceuticals".

The geographic balance of the pharmaceutical market continues to shift away from the US toward the world's emerging markets-countries with a per-capita Gross National Income of less than $20,000. These countries currently represent 17 per cent of the global market, but will contribute 30 per cent of growth next year. In emerging markets, the availability of healthcare is expanding, and the need for treatments associated with chronic diseases more typically found in developed countries is rapidly increasing.

Growth in the emerging markets is offsetting the slower growth coming from the US market, which will contribute about 36 per cent of total market growth in 2007, significantly less than the 54 per cent it contributed five years earlier.

The number of new product launches next year is expected to be in the range of 25 to 35, comparable to this year's expected 30 launches. However, with pharmaceutical companies increasingly developing specialty products and treatments to serve niche markets, new products are contributing less to overall market expansion than they have in the past. Moreover, market expansion from new products is not keeping pace with the loss of patent protection by older products. In 2007, marketed products with a value over $16 billion will likely lose patent protection, which comes on top of $23 billion of products that lost protection in 2006.

Several sectors of the market are expected to register high levels of demand in 2007, particularly biotechnology, with estimated growth of 13-14 per cent, specialist-initiated products with 10-11 per cent growth, and the generics market with 13-14 per cent growth. In the generics sector, growth is stemming from opportunity in several key therapeutic areas and increased volume driven by cost-control initiatives.

The total number of blockbuster products continues to grow and is expected to reach 112 in 2007, up from 94 in 2005. In 2007, the potential blockbuster products launched will be paliperidone for schizophrenia, desvenlafaxine for depression and vildagliptin for diabetes.

"Undoubtedly, the most powerful force rebalancing growth in the worldwide market is pressure from public and private payers to limit their expenditures on drugs," said Aitken. "Their influence is offsetting much of the growth that stems from rising demand and innovation. Manufacturers increasingly must strengthen the evidence that their therapies deliver 'value for the money' based on direct health outcomes."

In the US, 2007 market growth is forecast to slow to 4-5 per cent, compared to 6-7 per cent expected in 2006. The Medicare Part D prescription drug benefit has expanded the overall US market by nearly one per cent in 2006, with a further uplift of 1-2 per cent expected through 2007 while formularies remain relatively unrestricted. However, the loss of patent protection for several key brands valued at $10 billion will significantly impact the US market next year, following the patent expiry of $19 billion in branded products in 2006. Growth from new products will not be sufficient to offset the volume of branded drugs that shift to generics.

In Europe, the top five markets (France, Germany, the United Kingdom, Italy and Spain) combined are forecast to grow 3-4 per cent, down from the 4-5 per cent pace expected in 2006. While these countries see increased demand from an aging population, growth is being affected by cost-containment measures, incentives for using generics and increased scrutiny of the cost/benefit of drugs.

The Japan market is forecast to grow 5-6 per cent in 2007, up from an estimated 1-2 per cent this year that resulted from the government's biennial price cuts imposed on April 1, 2006.

Emerging markets, including China, India, Brazil and Turkey, are growing over 10 per cent in 2006 and will do so again in 2007, largely due to their growing economies and broader access to medications. Growth in China will be 15-16 per cent and the market size will reach $15-16 billion in 2007. Generally, locally manufactured generics dominate these markets.

An aging population and improved diagnostics have increased demand for oncology treatment-a challenge that the industry has met with a strong flow of innovation. Science has changed the face of the disease; survival rates are improving and some cancers are now considered chronic illnesses or even preventable conditions.

Products used in the treatment of oncology are expected to reach $40-45 billion in value in 2007, contributing nearly 20 per cent of total market growth. "Through 2007, this class will expand rapidly as more patients gain access to treatment from a growing range of therapies. But oncology products will eventually be subject to tighter pricing and usage parameters as payers deal with their mounting costs," noted Aitken.

Among other major therapy classes, the lipid-lowering class (including statins as well as Zetia and Vytorin) will grow to $30 to 33 billion, reflecting an estimated 1 - 2 per cent growth in 2007, down from 7-8 per cent this year. While the 2006 patent losses for simvastatin (Zocor) and pravastatin (Pravacho) will continue to affect growth, increased public awareness of the efficacy of lipid-lowering agents, broader patient screening and new combination therapies will continue to drive demand.