TAKE AN INDUSTRY UNDER constant assault from Congress, the press, and the public. Add one incredibly complex government program that will change the economics of the business in ways that no one yet understands. Subtract $23 billion in revenues from products that go off patent. Stir in regulatory uncertainties, less-than-exciting late-stage pipelines, and a new mood on the part of payers. What do you have? Let's call it 2006 for the pharmaceutical industry.
On the positive side, sales continue to grow, though at a slowing pace. IMS Health projects the global market will grow to between $640 and $650 billion in 2006, an increase of 6 to 7 percent (compared to 7 to 8 percent in 2005). The US market will account for $276 to $279 billion, an increase of 8 to 9 percent.
About 39 new products are expected to launch, 26 of them targeted at specialists. Among the list: Sanofi-Aventis' Acomplia (rimonabant); Pfizer's inhaled insulin product, Exubera; the insomnia drug indiplon from Neurocrine Biosciences; and Pfizer's cancer drug Sutent (sunitinib). (For more on emerging products, see Pharm Exec's annual Pipeline Report.)
As IMS sees it, growth this year will be less in primary care and more in specialty, less in traditional pharma and more in biotech, less in branded and more in generics. "Companies need to look strategically at where growth is coming from and how to balance their portfolios to take advantage of it," says Aitkin.
Geographically, China should be the fastest-growing market on a percentage basis, with growth in the 17 to 18 percent range. "All the signs point to the critical need for companies to invest in this country now," says Aitkin. Non-Japan Asia, Latin America and Eastern Europe continue to grow rapidly. And as for Europe, "The only way it starts to look good is that it's looked so bad for the last couple of years," says Todd Clark, president of VOI Consulting. Trends to watch in Europe: The European Agency for the Evaluation of Medicinal Products (EMEA) is ahead of FDA on biogenerics, and some products could reach market by fall. And traditional generics are finally catching on in a big way, especially in southern Europe.