While the global economy might be on a wild rollercoaster ride, pharmaceutical sales are forecast to hold steady in 2009—a change of pace for an industry that’s witnessed a decrease in growth in the past few years.
According to IMS Health’s annual global pharma forecast, the worldwide pharma market is predicted to grow 4.5 to 5.5 percent in 2009, in line with 2008 numbers.
What’s changing is where the growth will come from. The United States is expected to grow only slightly next year (1 to 2 percent), while emerging markets in the Far East are gaining considerable ground (14 to 15 percent). That realization, along with increased innovation in specialty-driven products and a decrease in primary care drug advancements, signals the need for a change in the entire process of how drugs are made and sold.
“There is steady growth in the worldwide market. However, where that growth can be found is different from what we have seen in the past,” said Diana Conmy, director of corporate growth at IMS Health. “The market is changing, the pockets of growth are a little harder to find, but they are still there.”
IMS said that stuttering US sales growth is due partially to the decline in blockbuster drugs on the horizon. The report predicts that between 25 and 30 new chemical entities will come to market in the next year, continuing the steady drop of the last decade.
Specialty and biologic product—particularly HIV and oncology therapies—have taken the spotlight, with growth expected in the 8 to 9 percent range, accounting for nearly 67 percent of total market growth. Meanwhile, primary care drugs—plagued by patent expirations—are only expected to grow only 2 to 3 percent in 2009.
“The mature markets are not necessarily delivering as they have in the past,” Conmy said. “From a geographic perspective, we are now looking at some of these ‘pharmerging’ markets to deliver stronger growth.”
Pharmerging markets is a label coined by IMS to describe emerging markets in Africa, India, China, and Australia, which are expected to have higher growth rates over the next five years. These are large regions that have stronger gross domestic product (GDP) growth, and are now offering programs to give expanded access to medicine, IMS said.
“Many of the multi-national companies are already in these markets, and have strategies planned,” Conmy said. “They are looking to take advantage of the growth happening in those markets, and develop more of a presence by adapting their portfolios or through partnerships.”
It has been reported that the pharmaceutical industry hasn’t been hit as hard by the recent economic crunch as other industries, but the recent rash of layoffs and restructuring plans might leave some uneasy.
IMS notes that it paid more attention this year to macroeconomic factors than it had in the past. “We found a strong correlation between GDP growth and consumer expenditure growth,” Conmy said. “If there is some sort of major change to the GDP growth in consumer expenditure over what we have embedded in our forecast, then that certainly is a wild card—that could be a game changer.”
IMS Health, a data-gathering firm and consultant agency, adjusts its report throughout the year to compensate for fluctuations in the forecast.