China is expected to enter 2011 as the third largest pharmaceutical market after the US and Japan, overtaking Germany with a predicted 25 per cent growth and $50bn in sales.
By 2015, annual spending on prescription drugs in another 16 emerging markets is expected to increase by at least $1bn, which for the lowest spender in the group, Vietnam, will mark a doubling of this year’s expenditure.
Innovative products in areas of stroke prevention, melanoma, multiple sclerosis, breast cancer and hepatitis C are expected to enter the market next year, representing 30-35 new chemical and biological entities with five predicted to reach blockbuster status.
While 2011 is expected to bring global drugs sales of $880-890bn, “the underlying constraints to growth in developed markets are stronger than ever”, according to Murray Aitken, Senior Vice President at IMS, with “major drugs losing patent protection and facing generic competition for the first time”. The new potential blockbuster drugs are not expected to provide market growth “beyond what we’ve seen in the past 3 years which is at historically low levels”.
Blockbuster drugs with sales over $30 billion will lose patent protection by the end of 2011 which is expected to boost generic competition and impact drug sales most noticeably in 2012. These are some of the most “iconic” drugs, as described by Aiken, including cholesterol lowering drug Lipitor, the world’s top-selling drug, antipsychotic drug Zyprexa and antibiotic Levaquin.
Further constraint will be added by government health programs reducing their expenditure on prescription drugs in order to restore fiscal balance while private payers follow tighter budgetary control mechanisms:
In Canada, pharmacy rebates are being eliminated; in Spain and Canada the prices of generics are being substantially reduced; in Germany new brands are being subjected to price negotiations and in Greece and Turkey significant price cuts are being implemented for branded products.
Senior Vice President of PhRMA, Wes Metheny, said yesterday that “The latest IMS Health projections continue to reflect some of the lowest growth rates on record for spending on prescription medicines”. Despite the increase of between 3 and 5 percent for US drug sales in 2011, growth will remain at a historically low level compared with growth of “8.3 per cent in 2004 and 19 per cent in 1999”.
PhRMA has outlined its “continued commitment to innovation”, detailing the importance of investment in prescription medicines which have played “a key role in the dramatic declines in death rates resulting from cancer, heart disease and HIV/AIDS in recent years”.
“Reducing the need for health care services because fewer Americans have costly conditions like diabetes and heart disease will pay both human and economic dividends”, said Aitken.
The IMS report corresponds with the notion many drug making executives have followed with plans to increase sales in emerging markets, many adding sales representatives, research facilities and low-cost factories in those countries.