The global market for pharmaceuticals is expected to grow nearly $300 billion over the next five years, reaching $1.1 trillion in 2014, says IMS Health.
The market analysts predict a global growth rate of 5-8% during this time, due to the impact of leading products losing patent protection in developed markets, as well as strong overall growth in the world's emerging countries.
However, the forecast is worsening for the UK market, where IMS estimates annual growth will drop from 3.2% in 2009, to 1-1.7% between 2010 and 2014.
These conclusions are included in the latest release of IMS Market Prognosis, the company's series of strategic market forecasting publications.
Global pharma sales growth of 4-6% is expected this year, consistent with IMS's prior forecast. In 2009, the market grew 7.0% to $837 billion, compared with a 4.8% growth rate in 2008.
“Patient demand for pharmaceuticals will remain robust, despite the ongoing effects of the economic downturn being felt in many parts of the world,” said IMS's Murray Aitken, Senior Vice President, Healthcare Insight. “In developed markets with publicly funded healthcare plans, pressure by payers to curb drug spending growth will only intensify, but that will be more than offset by the ongoing, rapid expansion of demand in the pharmerging markets.
“Net growth over the next five years is expected to be strong – even as the industry faces the peak years of patent expiries for innovative drugs introduced 10-15 years ago and subsequent entry of lower-cost generic alternatives.”
In its analysis, IMS identifies several key market dynamics.
- Pharmerging markets – IMS predicts pharmerging markets will grow at a pace of 14-17% through to 2014, while major developed markets will grow at just 3-6%. The US is expected to remain the single largest market, with 3-6% growth annually in the next five years and reaching $360-390 billion in 2014, up from $300 billion in 2009.
- Therapy areas – Due to the wide availability of low-cost generics in many chronic therapy areas, R&D focus will switch to areas where there is significant unmet clinical need, high-cost burden of disease and innovative science that can bring new treatment options. In oncology, diabetes, multiple sclerosis and HIV, annual growth is expected to exceed 10% through to 2014 as new drugs are brought to market, patient access is expanded and funding is redirected from other areas.
- Spending cuts – Under increased pressure to save money, countries with publicly-funded healthcare systems may seek to cut spending on medicines. Turkey, Spain, Germany and France, as well as others, have already announced plans to apply across-the-board restrictions on access or reductions in reimbursements.
- The generic threat – Over the next five years, products with sales of more than $142 billion are expected to face generic competition in major developed markets. The impact of this shift to generics in major therapy areas such as cholesterol regulators, antipsychotics and anti-ulcerants will reduce total drug spending by about $80–100 billion worldwide through to 2014. This will particularly impact the US, where six blockbuster products are expected to hit patent expiry in 2011-2012.
- Rigorous assessment – The number of new molecular entities launched annually over the next five years is expected to remain in the range of 30 to 35 products. However, these will be subject to more rigorous and complex assessments by payers before being accepted and reimbursed. As funding and implementation of healthcare at regional or local levels becomes more significant, the time it takes for new medicines to be made available will extend.
Aitken added: “The expected global economic recovery removes an element of uncertainty for the industry over the next five years, although the way payers address lingering budget deficits will remain an issue in many markets. Health system reforms, such as those to be implemented in the US, can spur fundamental change in the market – but the full impact may not be felt until the latter half of this decade.”
Leading up to 2020, IMS forecasts a continuing shift toward biopharmaceuticals, specialty-driven products, and changes in the mix of disease areas of interest.
IMS Market Prognosis offerings are subscription-based, strategic market forecasting publications that provide unparalleled insights into the economic and political issues affecting the pharmaceutical and healthcare industries. Based on a rigorous evaluation of the key events affecting the marketplace, IMS Market Prognosis provides a five-year forecast at the country, regional and global level.