Healthy Skepticism Library item: 7272

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Publication type: news

Agovino T.
Pharmaceutical Growth Expected to Slow: Growth in the Global Pharmaceutical Market Is Expected to Slow Next Year
Yahoo Finance 2006 Oct 24
http://biz.yahoo.com/ap/061024/prescription_drug_market.html?.v=2

Abstract:

Growth in the global pharmaceutical market is expected to slow next year as generic competition in the United States and pricing pressure in Europe overshadow exploding demand in developing countries, according to a new study released Tuesday.
The overall prescription market will grow between 5 percent and 6 percent next year to between $665 billion and $685 billion, compared with a 6 percent to 7 percent rise this year, said IMS Health, which tracks prescription drug sales.

The study said that between 25 and 35 new products will be introduced in 2007, comparable to this year’s 30 expected launches.

However, many new products are for diseases that don’t affect large populations so they don’t generate as much revenue as medications for conditions such as cholesterol and heart disease which have millions of patients, said Murray Aitken, senior vice president of corporate strategy at IMS.

IMS predicted that growth in the U.S. market, the world’s largest, will fall to between 4 percent and 5 percent next year, from a rise of 6 percent to 7 percent in 2006. The new Medicare prescription drug benefit boosted the overall U.S. market by nearly 1 percent in 2006 and will lift it between 1 percent and 2 percent in 2007, the report said.

However, drugs with combined sales of $10 billion will lose patent protection in 2007 in the United States. That comes after products with total revenue of $19 billion faced generic competition this year, but since some of those medicines didn’t lose patent protection until mid-2006, the true impact won’t be realized until 2007. Among the drugs that lost patent protection this year are cholesterol-lowering agents, Merck & Co.‘s Zocor and Bristol-Myers Squibb Co.‘s Pravachol.

In Europe’s five top markets — France, Germany, Italy, Spain and the United Kingdom — growth is forecast to jump 3 percent to 4 percent, down from a rise of 4 percent to 5 percent this year. That’s because the countries have implemented numerous cost-containment measures and incentives to promote generic drug use.

Drug sales in emerging markets such as China, India, Brazil and Turkey are expected to grow more than 10 percent in 2007, matching this year’s expansion rate. But these countries only account for about 17 percent of the global market.

In contrast, the United States accounts for 42 percent of the global market.