Fairfield, Connecticut, United States
IMS Health (NYSE: RX), the world's leading provider of market intelligence to the pharmaceutical and healthcare industries, announced that it expects global pharmaceutical market growth of 5 - 6 percent for 2007, compared with 6 - 7 percent in 2006, as the market continues to rebalance in light of changing market dynamics. According to IMS's 2007 Pharmaceutical Market Forecast, global pharmaceutical sales will expand to US$665 - 685 billion next year.
"In 2007, the market still will be absorbing changes that have defined a new economic reality, one in which growth is shifting from mature markets to emerging ones; new product adoption is not keeping pace with the loss of patent protection by established products; specialty and niche products are playing a larger role; and regulators, payers and consumers are more carefully weighing the risk/benefit factors of pharmaceuticals," said Murray Aitken, senior vice president, Corporate Strategy, IMS.
The geographic balance of the pharmaceutical market continues to shift away from the U.S. toward the world's emerging markets--countries with a per-capita Gross National Income of less than $20,000. These countries currently represent 17 percent of the global market, but will contribute 30 percent of growth next year. In emerging markets, the availability of healthcare is expanding, and the need for treatments associated with chronic diseases more typically found in developed countries is rapidly increasing.
Growth in the emerging markets is offsetting the slower growth coming from the U.S. market, which will contribute about 36 percent of total market growth in 2007, significantly less than the 54 percent it contributed five years earlier.
The number of new product launches next year is expected to be in the range of 25 to 35, comparable to this year's expected 30 launches. However, with pharmaceutical companies increasingly developing specialty products and treatments to serve niche markets, new products are contributing less to overall market expansion than they have in the past. Moreover, market expansion from new products is not keeping pace with the loss of patent protection by older products. In 2007, marketed products with a value over $16 billion will likely lose patent protection, which comes on top of $23 billion of products that lost protection in 2006.
Several sectors of the market are expected to register high levels of demand in 2007, particularly biotechnology, with estimated growth of 13 - 14 percent, specialist-initiated products with 10 - 11 percent growth, and the generics market with 13 - 14 percent growth. In the generics sector, growth is stemming from opportunity in several key therapeutic areas and increased volume driven by cost-control initiatives.
The total number of blockbuster products continues to grow and is expected to reach 112 in 2007, up from 94 in 2005. In 2007, the potential blockbuster products launched will be paliperidone for schizophrenia, desvenlafaxine for depression and vildagliptin for diabetes.
"Undoubtedly, the most powerful force rebalancing growth in the worldwide market is pressure from public and private payers to limit their expenditures on drugs," said Aitken. "Their influence is offsetting much of the growth that stems from rising demand and innovation. Manufacturers increasingly must strengthen the evidence that their therapies deliver 'value for the money' based on direct health outcomes."
Regional Forecasts
In the U.S., 2007 market growth is forecast to slow to 4 - 5 percent, compared to 6 - 7 percent expected in 2006. The Medicare Part D prescription drug benefit has expanded the overall U.S. market by nearly one percent in 2006, with a further uplift of 1 - 2 percent expected through 2007 while formularies remain relatively unrestricted. However, the loss of patent protection for several key brands valued at $10 billion will significantly impact the U.S. market next year, following the patent expiry of $19 billion in branded products in 2006. Growth from new products will not be sufficient to offset the volume of branded drugs that shift to generics.
In Europe, the top five markets (France, Germany, the United Kingdom, Italy and Spain) combined are forecast to grow 3 - 4 percent, down from the 4 - 5 percent pace expected in 2006. While these countries see increased demand from an aging population, growth is being affected by cost-containment measures, incentives for using generics and increased scrutiny of the cost/benefit of drugs.
The Japan market is forecast to grow 5 - 6 percent in 2007, up from an estimated 1 - 2 percent this year that resulted from the government's biennial price cuts imposed on April 1, 2006.
Emerging markets, including China, India, Brazil and Turkey, are growing over 10 percent in 2006 and will do so again in 2007, largely due to their growing economies and broader access to medications. Growth in China will be 15 - 16 percent and the market size will reach $15 - 16 billion in 2007. Generally, locally manufactured generics dominate these markets.
Therapeutic Classes
An aging population and improved diagnostics have increased demand for oncology treatment--a challenge that the industry has met with a strong flow of innovation. Science has changed the face of the disease; survival rates are improving and some cancers are now considered chronic illnesses or even preventable conditions.
Products used in the treatment of oncology are expected to reach $40 - 45 billion in value in 2007, contributing nearly 20 percent of total market growth. "Through 2007, this class will expand rapidly as more patients gain access to treatment from a growing range of therapies," noted Aitken. "But oncology products will eventually be subject to tighter pricing and usage parameters as payers deal with their mounting costs."
Among other major therapy classes, the lipid-lowering class (including statins as well as Zetia(R) and Vytorin(R)) will grow to $30 to 33 billion, reflecting an estimated 1 - 2 percent growth in 2007, down from 7 - 8 percent this year. While the 2006 patent losses for simvastatin (Zocor(R)) and pravastatin (Pravachol(R)) will continue to affect growth, increased public awareness of the efficacy of lipid-lowering agents, broader patient screening and new combination therapies will continue to drive demand.
Implications for Manufacturers
"Pharmaceutical companies have started to reinvent themselves in response to market challenges, and they look very different than they did just five years ago," commented Aitken. "But it is no longer enough just to be responsive. To succeed, companies need to get ahead of the dynamics that are rebalancing the market. This requires a greater reliance on scenario-based planning, a sharper focus on realizing productivity gains from sales and marketing expenditures, and proving the value of medications as never before."
About the Forecast
The 2007 forecast for market and therapy performance is based on extensive analyses by IMS consulting and forecasting experts. It uses IMS Market Prognosis, a strategic market forecasting publication, and IMS Therapy Forecaster, a unique forecasting system based on detailed quantitative and qualitative methodologies. Combined, these two tools deliver the most accurate and statistically robust insight into pharmaceutical and healthcare trends in the world's largest markets and most important emerging ones.
The forecasts take full account of key issues impacting the pharmaceutical and healthcare industries. Additional factors that may affect overall growth include major safety events resulting in product withdrawal or prescribing restrictions; shifts in regulatory approval standards from their current levels; the application of sudden cuts to drug spending levels; and public health crises such as the Avian flu. Growth is measured in constant dollars to avoid the influence of currency exchange rates; sales are calculated at the ex-manufacturer level.
About IMS
Operating in more than 100 countries, IMS Health is the world's leading provider of market intelligence to the pharmaceutical and healthcare industries. With $1.8 billion in 2005 revenue and more than 50 years of industry experience, IMS offers leading-edge business intelligence products and services that are integral to clients' day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and over-the-counter offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. Additional information is available at http://www.imshealth.com.
CONTACT: IMS Communications Barbara Henderson 610-260-6639 bphenderson@us.imshealth.com or Lance Longwell 610-834-5338 llongwell@us.imshealth.com
CONTACT: IMS Communications Barbara Henderson 610-260-6639 bphenderson@us.imshealth.com or Lance Longwell 610-834-5338 llongwell@us.imshealth.com , ,
Source: Business Wire (Business Wire India)