Robust pharmaceutical spending in 17 emerging countries led by China, and those governments making more treatment options available to their citizens, will offset patent losses and slow growth in the United States pharmaceutical market, according to a forecast by IMS Health.
IMS, an industry data company, expects the global drug market to grow 5% to 7% in 2011 to $880 billion. Drug sales for 2010 are expected to rise 4% to 5%.
Next year’s outlook is based, in part, on China’s anticipated strong growth—25% to 27% to $50 billion—making it the world’s third largest market for prescription drugs, according to IMS projections.
The United States, far and away the leader in pharmaceutical sales, is expected to reach $320 billion to $330 billion in 2011, up about 4% from the $310 billion forecast for this year, not including the impact of off-invoice discounts or rebates. Prescription sales in Canada and in Europe’s five largest markets—Germany, France, Italy, Spain and the United Kingdom—will inch up 1% to 3% next year, according to the IMS forecast.
The lower growth in Europe and the U.S. is also due to insurers and government health programs wanting to hold down spending on prescription drugs. Strategies include greater pre-authorizations for more medications, higher copayments and a reduction in reimbursement levels in some European countries.
“In 2011, we will see the loss of exclusivity for some iconic brands and a promising new wave of innovation,” said Murray Aitken, IMS senior vice president. “It also will be a critical year for gauging how healthcare reform initiatives in key markets evolve and play out amid the expected macro-economic recovery.”
Next year will mark the introduction and uptake of new drugs including innovative treatment options for stroke prevention, melanoma, breast cancer and hepatitis C, and the first oral medication to treat multiple sclerosis. IMS estimates five potential blockbuster drugs—each with more than $1 billion in annual peak sales—are expected to be approved and launched globally by the end of 2011.
On the down side, patents for drugs with sales of more than $30 billion will expire in 2011, including four medications that accounted for more than 93 million prescriptions dispensed in the past 12 months and $17 billion in total sales. They face low-cost, generic competition in the U.S. and other major markets.
“No doubt big pharma will look to emerging markets for opportunities to offset the loss of revenue to generic competition, but it won’t be easily done,” concluded the Burrill Report in its analysis of the IMS Health forecast. “The pricing pressures and generic competition that is new in developed markets is a fact of life in the emerging countries.”