A Slow Year for Pharma–with a Few Exceptions

March 19, 2008
Pharmaceutical Executive

Volume 0, Issue 0

The US pharma market grew just 3.8 percent last year, according to IMS Health. The big loser: lipid regulators. The winners: Biologic response modulators and monoclonal antibodies.

As the long growth spurt of the US pharma market slows to a crawl, and as several key therapeutic areas experience double-digit percentage losses, there are still a few pockets of rapid growth in the industry.

The figures come from IMS Health, which last week released its annual US Pharmaceutical Market Performance Review. The top-line numbers aren't pretty: In 2007, the US pharma market grew by only 3.8 percent to $286.5 billion. This brings pharma's rate of US market growth to its lowest point in more than a decade and continues a slowing trend that started in 2000.

These figures tell only part of the story, however. Here's a deeper look:
Specialty and biotech stay strong Branded drugs took the biggest hit, with a market growth rate of just 2.9 percent. Unbranded generics kept pace with the overall market with a growth rate of 3.8 percent. Biotech and specialist-driven products were ahead of the pack, with growth rates of 9 percent and 10.5 percent respectively.

Volume slows Total prescriptions written grew by only 2.8 percent to 8.8 billion. Of the top-10 therapy classes, lipid regulators had the strongest volume growth (8.8 percent), followed by drugs for seizure disorders (7.3 percent) and proton pump inhibitors (6.6 percent). About 19 percent of volume comes via Medicare Part D.

Some key categories are shrinking Lipid regulators may be up in prescription volume, but in dollars, the category has shrunk by more than 15 percent, to a bit over $18 billion. Erythropoietins are down by about 14 percent and antidepressants by 13 percent. The big winners in the top-10 categories: biological response modulators, which grew almost 20 percent to $5.3 billion, and monoclonal antibodies, which grew at 17.4 percent.

Generics continue to gain volume In 2007, generics accounted for 67.3 percent of scrips written. (That broke down to 58 percent unbranded generics and 9.3 percent branded.) The equivalent figures in 2002 were 51.4 percent—40 percent and 11.4 percent, that is. Over the course of six years, branded drugs have moved from roughly half of all US prescriptions to roughly a third. Look at the dollars, however, and the picture changes: Generics were about 14 percent of the market in 2002, and they're only about 20 percent today, with branded generics accounting for about half.

The US pharma market will grow at an annual rate of only 3 to 6 percent through 2012, predicts Diana Conmy, corporate director of market insights at IMS Health. However, Conmy told Pharm Exec that the drop in growth shouldn't come as much of a surprise to most pharma companies.

"This is quite a drop from the double-digit growth in the late 1990s," said Conmy. "The market is now in a low-growth environment. Although pharma is still getting the incremental dollars that are coming into the market, the rate of growth of those dollars is slowing down."