IMS Health Forecasts 4.5 - 5.5 Percent Growth for Global Pharmaceutical Market in 2009, Exceeding $820 Billion
Key Dynamics Shaping Market:
-- Robust, double-digit growth in 'pharmerging' markets
-- Increased focus on specialty-driven therapies
-- Leveling of U.S. growth at 1 - 2 percent
-- Worldwide economic volatility
NORWALK, Conn.--(BUSINESS WIRE)--Oct. 29, 2008--The global pharmaceutical market is expected to grow 4.5 - 5.5 percent next year, a pace similar to 2008, according to the IMS Global Pharmaceutical and Therapy Forecast(TM) released today by IMS Health (NYSE: RX). The forecast, the leading annual industry indicator of market dynamics and therapy performance, predicts global pharmaceutical sales to surpass $820 billion in 2009, reflecting sustained double-digit growth in key emerging countries tempered by a slower pace in more established markets. This includes the U.S., where growth is expected to be in the 1 - 2 percent range for both 2008 and 2009.
"In many respects, 2009 will reflect the new shape of the global pharmaceutical market, the result of market factors that have gained momentum over the past several years," said Murray Aitken, senior vice president, Healthcare Insight, IMS. "Pharmaceutical growth next year will hold steady at 2008 levels. The market will continue to contend with a number of forces - among them, the shift in growth from developed countries to emerging ones, specialist-driven products playing a larger role, blockbuster drugs losing patent protection, and the rising influence of regulators and payers on healthcare decisions. Layered on top is the uncertainty in the global economic environment and its effect on demand."
In its 2009 forecast, IMS identifies the following key market dynamics:
-- Slowing Growth in Mature Markets. This year, the U.S.
pharmaceutical market, the world's largest, is forecast to
grow 1 - 2 percent to $287 - $297 billion, down from the 2 - 3
percent rate expected earlier this year. Contributing to the
slower growth is less-than-expected demand for recently
introduced products, as well as the economic climate, which
appears to be having an impact on doctor visits and
In 2009, the expected 1 - 2 percent growth rate in the U.S. will
result in sales of $292 - $302 billion, and reflects the impact of
continuing patent expirations, fewer new product launches and a
tighter economy. The top five E.U. countries (France, Germany,
Italy, Spain and the United Kingdom) are forecast to grow 3 - 4
percent next year, reaching sales of $162 - $172 billion. In
Europe, growth driven by the continued aging of the region's
population and rising demand for preventive care will be tempered
by the increased impact of health technology assessments, the use
of contracting by payers as a means to control costs, and the
decentralization of government healthcare budgets. Japan, the
world's second-largest market, is expected to see higher growth of
4 - 5 percent, reaching $84 - $88 billion. Approvals of new
anti-cancer agents, disease prevention programs, and the absence
of the Japan government's biennial price cuts all will contribute
to stronger growth. Government efforts to promote the use of
generics will have only a modest impact on the Japan market in
-- Rapid Expansion of "Pharmerging" Markets. The pharmerging
markets of China, Brazil, India, South Korea, Mexico, Turkey
and Russia are forecast to grow at a combined 14 - 15 percent
pace to $105 - $115 billion. Along with the pharmaceutical
industry's increased focus on these high-growth markets, these
countries are benefiting from greater government spending on
healthcare and broader public and private healthcare funding -
which is driving greater access to, and demand for, innovative
-- An Emphasis on Specialist-Driven Markets. Products mainly
prescribed by specialists are forecast to grow 8 - 9 percent
in 2009 and are expected to contribute 67 percent of total
market growth. Biologics are forecast to grow at an 11 - 12
percent pace, while oncology products will achieve 15 - 16
percent growth, and HIV therapies 13 - 14 percent growth. In
contrast, products generally prescribed by primary care
physicians are expected to grow 2 - 3 percent, due to the loss
of patent exclusivity for several blockbusters and fewer
significant product launches.
-- Fewer Products Winning Regulatory Approval. New product
approvals remain at historically low levels, with only 25 to
30 new chemical entities slated for launch in 2009. In
addition, many of these are specialist-driven and niche
products with relatively limited market potential. Expected
launches for 2009 include four or five potential blockbusters
for treating acute coronary syndrome, diabetes, rheumatoid
arthritis and meningitis.
-- An Economic Slowdown, Most Pronounced in the U.S. Economic
conditions will be a complicating factor impacting the
worldwide pharmaceutical market in 2009. In the U.S., the
correlation between economic factors and pharmaceutical growth
is stronger in the current slowdown than in previous
downturns, given the continued shift of drug-related costs to
patients. IMS estimates that in 2009, the downturn will
effectively reduce growth in the U.S. by 2 - 3 percentage
points. Other markets with large out-of-pocket spending
requirements - including Brazil, India and Russia - also are
likely to be affected by economic changes.
-- Generics Market Continues to Evolve. An additional $24 billion
of branded products, including anti-epileptics, proton pump
inhibitors and anti-virals, will lose their market exclusivity
in the top eight markets in 2009. This will contribute to
generics sales of more than $68 billion next year, and a 5 - 7
percent growth rate - similar to 2008 and lower than the
levels experienced in 2006 and 2007. The decline is being
driven by growth slowdowns in the U.S. and U.K., where many
competitors in large therapy areas are creating a fierce price
war and cutting margins for generics manufacturers. Other
countries are striving to increase the use of generics through
various government efforts.
-- Intensified Involvement of Payers and Health Technology
Assessors. In 2009, growth across the leading European markets
will be affected by payer actions, which include increased
rebating and contracting in Germany, expansion of regional
formularies in Italy, a five percent decrease in branded
prices in the U.K., a 10 percent price reduction on a number
of brands in France, and the expansion of the reference
pricing system in Spain. Meanwhile, the impact of Heath
Technology Assessors will be felt in Germany by reimbursement
limitations for new drugs not determined to be cost effective.
And in the U.K., the pharmaceutical market may be affected by
any policy change that allows patients to buy additional
treatments not offered by the National Health Service.
A number of events may occur in 2009 that also could have a long-term impact on the pharmaceutical market. These include the uptake of biosimilars in human growth hormones and erythropoietins in Europe, the adoption of generics in Japan, the use of contracting strategies across the E.U., the deregulation of the pharmacy sector in Europe, and the potential for healthcare policy changes in the U.S. following the November presidential election.
Added Aitken, "Biopharmaceutical companies can still find avenues of growth by focusing on emerging markets, specialist-driven products and biologics, by uncovering pockets of unmet need and underutilization in primary care markets, by demonstrating the superior value of their medicines, and by re-invigorating their established brands. The growth is not where it used to be, and it may not be as easy to come by, but it is out there. The key to success in this new environment will be in adapting the pharmaceutical industry's commercial models to accommodate these new developments."
About the IMS 2009 Global Pharmaceutical Market and Therapy Forecast
The 2009 forecast of market and therapy performance is based on extensive analyses by IMS consulting and forecasting experts. It uses IMS Market Prognosis, a strategic market forecasting publication, and IMS Therapy Forecaster, a unique forecasting system based on detailed quantitative and qualitative methodologies. Combined, these tools deliver the most accurate and statistically robust insight into pharmaceutical and healthcare trends in the world's largest and most important emerging markets.
The forecasts take full 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 Prognosis forecasts use an econometric model including forecasts for economic indicators such as Gross Domestic Product (GDP), Consumer Expenditure (CEP), and the Consumer Price Index (CPI) from the Economist Intelligence Unit. As the basis for the forecast model, changes in these indicators will impact forecasted pharmaceutical performance.
Operating in more than 100 countries, IMS Health is the world's leading provider of market intelligence to the pharmaceutical and healthcare industries. With $2.2 billion in 2007 revenue and more than 50 years of industry experience, IMS offers leading-edge market intelligence products and services that are integral to clients' day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and consumer health offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. Additional information is available at http://www.imshealth.com.
Posted: October 2008
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