Pharmaceutical Industry

Big Shift in Store for the Pharmaceutical Market

A shift from mature markets to emerging ones will impede growth in the global pharmaceutical marketplace, according to the forecast of one healthcare market intelligence company. Expected growth will likely be at 5-6 percent for 2007 compared to 6-7 percent this year as global sales expand to $665-685 billion next year, according to the 2007 Pharmaceutical Market Forecast by market intelligence firm IMS Health.

“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.

Growth in emerging world markets is expected to offset the slower growth domestically, according to IMS. While the US accounted for 54% of the total market growth five years ago, IMS anticipates it will contribute a mere 36% of the growth in the coming year.

Although IMS forecasts a similar number of product launches for 2007, new products are expected to have a much smaller impact on the overall market than they have in the past because they are comprised so predominantly of specialty-oriented products.

Other highlights of the IMS forecast:

• Areas of the market showing the greatest demand should include biotechnology, specialist-initiated products and generics.
• Blockbuster products with anticipated launches in 2007 include paliperidone for schizophrenia, desvenlafaxine for depression and vildagliptin for diabetes.
• Emerging markets such as China, India, Brazil and Turkey are expected to grow by better than 10% in 2007 as their economies develop and medications become more available to them.
• The combination of an aging populace and corresponding technology could mean that oncology will account for as much as 20% of the total market growth. Products used in the handling of oncology are expected to reach $40 billion in value during the coming year.

There is another factor that must not be overlooked.

“The most powerful force rebalancing growth in the worldwide market is pressure from public and private players 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.”