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. 

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News Analysis

Sure, industry growth is at "historically low levels," but at least pharma is still growing. The industry's market value should surpass $825 billion in 2010, and forecasted growth was bumped up one percentage point from original estimates.

Global Pharma Market Growth to Grow 4 to 6 Percent in 2010

This week saw the release of the first batches of the new H1N1 vaccine, and with it came the usual fears that there won’t be enough treatments to go around, or that the vaccine will cause more harm than good.

According to the CDC, those rumors are unfounded. 

“Each Friday, we'll provide information on the amount of vaccine available to each state and the amount of vaccine each state has ordered,” said Thomas Frieden, director of the Center for Disease Control and Prevention.” “That's a little complicated, because what we have decided to do is make vaccine available as soon as it comes off the production line. That means it's coming available in lots, and states learn each day of additional vaccine available to them. It's a little bit of a messy process, and we expect it to be somewhat bumpy in the first few weeks.” 

First out the gate is the nasal version of the vaccine, which is being distributed to healthcare workers and infants this week. The traditional injectible vaccine will follow with a million doses being delivered every week starting in late October.

On Tuesday, GlaxoSmithKline announced that it has received 22 government orders for 149 million doses, bumping the total does in production to 440 million, with treatments being made available through early 2010. GSK stands to make upwards of $3.5 billion from the H1N1 vaccine, according to reports by Reuters. 

Novartis also announced that it had shipped the first batch of its H1N1 vaccine, as well as 27 million doses of its seasonal vaccine. Novartis received contracts worth $979 million for its H1N1 vaccine.

“The early shipment is the first of an accelerated effort to provide as much H1N1 vaccine as soon as possible, despite the low yield seen with the initial production seed strain provided by the World Health Organization,” Novartis stated in a release. Production has switched to a higher yielding seed strain, which will allow deliveries of higher volumes later in the year.” 

But there are people choosing not get the H1N1 vaccine because they feel that it hasn’t been tested enough. There’s an underlying concern that because this particular flu shot is new, it is physiologically different from the seasonal flu shot released each year.

“We have cut no corners,” Frieden said in a conference call. “This flu vaccine is made the same way the flu vaccine is made each year-by the same companies, in the same production facilities, with the same procedures, and with the same safeguards. We have had literally hundreds of millions of people vaccinated with flu vaccines made in this way.”

Pulling off an incredibly fast turnaround, the pharma industry has released a vaccine for the H1N1 virus, bolstering its bottom line with a second flu vaccine and potentially helping millions of people. So why is there such an uproar over whether it's safe?

Pharmaceutical Executive-10-08-2009

Global Pharma Market Growth to Grow 4 to 6 Percent in 2010

H1N1 Vaccine Hits the Market