Pharma sector growth to improve in 2011
pharmafile | November 19, 2010 | News story | Sales and Marketing | 2011, IMS, IMS Health, forecast, growth, pharma
2011 should be a better year for pharma as emerging markets and recovering economies will help growth, say analysts at IMS Health.
The industry analyst has forecast growth at between 5-7% globally, with total industry revenues due to hit a maximum of $890 billion
Murray Aitken, Senior VP at IMS Health said next year’s growth will be helped by three things.
The first will come from Japan as its biennial prices cuts will not fall on 2011, which will see growth for the world’s second largest pharma market grow from just 1% in 2010, to 5-7% next year.
The second will be the slight increase in growth from the US – forecast to grow by an extra percentage point to 5% in 2011.
The decrease this year, Aitken said, was from severe winter weather that saw a drop in doctor visits – and thus prescriptions – and earlier-than-expected generic competition.
The third will be from the so-called ‘pharmerging markets’, comprising of 17 countries that include China, Russia, India, Brazil, Mexico, Turkey, South Korea, Venezuela, Poland, Argentina, Vietnam, South Africa, Thailand, Indonesia, Egypt, Pakistan, and the Ukraine.
Collectively, IMS predicts that these markets will see growth of between 15-17%, up 3% on last year.
China will be the strongest force from all emerging markets, as it is set to grow by 25% over the next year, becoming the third largest pharma market in the world.
Constraints to growth
Aitken stressed however that constraints to growth from EU and US health reform would be “stronger than ever” and that pharma will need to accommodate this new reality.
“Patent expiries and payers’ action will also to continue to limit drug spending,” Aitken said.
“We’re seeing both public and private payers around the world enacting budgetary control mechanisms: in Spain and Canada, we are seeing substantial reductions in their pricing of generics, with Canada additionally ending all pharmaceutical rebates.
“Turkey has also made major price cuts across the board and Germany are putting into law a system that makes pharma negotiate prices with its Health Ministry.”
Aitken says this has become the new reality for pharma to work within, and cuts will continue into 2011 and beyond.
On patent expiries, the industry is moving into its “two biggest years”.
Products with over $30 billion of sales are expected to go off patent in major markets in 2011. The world’s biggest selling drug Pfizer’s Lipitor, will lose its US patent protection on 30 November 2011, which will signal a rapid erosion in its global revenues of $12 billion.
Sanofi-Aventis and BMS’ anticoagulant Plavix, the world’s second biggest selling drug, and Lilly’s schizophrenia drug Zyprexa will also face generic competition.
Aitken said that while the patents will end next year, the full impact of their loss would not be felt until 2012, meaning 2011 would not be so highly affected by generic erosion.
Ben Adams
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