The global pharmaceutical marked is expected to grow 4 to 6 percent in 2010 to $825 billion, according to the updated forecast from IMS Health. Over the five years ending 2013, the global market is expected to expand 4 to 7 percent, IMS reports. That’s up one percent from previous predictions of 3 to 5 percent, reported in April.
“While that’s a positive piece of news, it still puts the global pharmaceutical growth rate at historically low levels,” IMS Senior Vice President Murray Aitken told reporters on Wednesday.
The US market is expected to strengthen in the near term, due to a boost in pharmacy stocking levels in 2009. Also, price increases for protected products are continuing at a good rate. IMS had originally predicted that drug prices would slow down due to the recession, but it turns out that pharma firms have maintained pricing practices through the economic downturn. Traditionally, drug manufacturers raise their prices 5 to 6 percent every year for branded medication.
“The relative impact in the US has been more modest that we expected,” Aitken said. “Part of this is because pharmaceutical manufacturers have stepped up their efforts to provide support to patients through patient assistance programs, copay subsidies, and so on.”
In other parts of the world, the impact of the economic downturn depends on the severity of the recession in the particular country and the structure of funding for pharma companies.
“For countries that have deep recessions and where out-of-pocket spending is the major funding mechanism for pharmaceutical drugs—including Russia, Mexico, and South Korea—we are seeing a pretty significant slowdown in growth,” Aitken said.
Another problem is the number of products going off patent versus new products coming to market. The balance is skewed, with more value coming through new generics than new innovative products coming onto the market, according to Aitken.
“This is a major factor dampening growth prospects over the next five years,” Aitken said. “During that time period, globally will we have an unprecedented $137 billion worth of products that are expected to face generic competition, particularly in 2011 and 2012 when Lipitor, Plavix, and Advair go off patent.”
That said, there are new products coming to market, but most of them are focused on relatively narrow indications and small patient groups. Pharma has a handful of potential billion-dollar drugs coming to market, but they aren’t expected to offset the blockbusters going off the market.
The “pharmerging markets” (a term coined by IMS) are expected to continue to grow 12 to 14 percent next year, and 13 to 16 percent over the next five years. “That’s not withstanding a significant impact felt in some of those markets from the economic slowdown, in particular Russia, Turkey, and Mexico,” said Aitken. They are being offset by strong growth in China—expected to be 20 percent per year.
IMS Health said that the forecast could be altered depending on the outcomes of the healthcare reform plan, a boost in income from the addition of the H1N1 vaccine, and an up- or downturn in the economy.