If you look closely at the thunderclouds hovering over pharma, there is a ray of light peeking through the gloom—IMS’ updated 2009-2014 forecast has come in, and it’s a far cry from the unmitigated doom of recent years. Market growth in 2009 was 7 percent, a vast improvement over 2008’s 4.8 percent, and IMS expects the global pharma market to grow to $1.1 trillion in sales by 2014.
Several factors were involved in that nice little uptick, said Murray Aitken, senior vice president of IMS Healthcare Insight, in a conference call on Monday. “First, US market growth was higher than 2008.” Secondly, he added, Japan’s pricing structure calls for a price reduction every two years—and 2008 was one of the reduction years. And third, the “pharmerging” markets continued their upward spiral, with China leading the pack.
These pharmerging markets will continue to account for a significant portion of global growth. While the overall global growth rate is forecast to be anywhere from 5 to 8 percent, for pharmerging markets the expected pace is 14–17 percent through 2014. This should bring “developed” and “developing” neck-and-neck in terms of dollars—about $120 billion to $140 billion. The majority of the market in developing countries will be eaten up by generic or unbranded meds, though Aitken said branded products are beginning to carve out a niche in these territories. Meds for chronic conditions like diabetes and hypertension will see the biggest jump, as prevalence and diagnoses increase.
In emerged-markets news, Aitken said the recent healthcare reform bill passed in the US will have less than a 1 percent impact on the US forecast to 2014. But what comes afterward might not be as pleasant. “We may be picking up more of the impact as the act comes into play,” Aitken cautioned.
Europe, as well, remains an uncertain territory. “There’s closer scrutiny from payers in single-payer markets as well as others,” Aitken said. Countries such as Germany and Spain, in particular, are increasingly reluctant to take up a drug with efficacy evidence that is not as compelling as one already covered.
The light dims ever so slightly for 2010’s forecast when compared to 2009’s performance. According to IMS, we can expect 4 to 6 percent this year. Aitken said the reasons for these smaller numbers are similar to those from 2008. “We have yet to see the impact of some of the changes in the European markets, most of which are lowering growth in 2010,” he said. “That’s driven by some initial actions taken to reduce spending.” Add to that the aforementioned biennial price cut in Japan and several big patent expiries in the US—leading to a 3 to 5 percent rate—and it’s no surprise the market will slow.
The righting of the global economy is expected to take some time and will have a somewhat lasting impact, but Aitken said strong growth and continued high-level demand will overcome any negative effects.