Graham Lewis, IMS Health, VP Global Pharma Strategy, made the prediction at DCAT* Week ’16 in New York, telling delegates that slowing growth rates in countries like China are changing pharmaceutical industry dynamics.
“If I said to you last year that the industry is no longer global, I’m going to say it with even more force this year,” said Lewis. “Growth in China is falling.”
Specifically, market growth in China has fallen to mid-single digits. Lewis predicted growth will continue atr this rate until the Chinese government “gets to grips with economic problems.”
These problems stem from the size of China’s debt, which Lewis said is difficult to manage in a country that has grown so quickly.
Brazil is experiencing similar issues according to Lewis who said that, while there is some measure of control in China, Brazil is “out of control.”
“Until the challenges that exist in Brazil are addressed … Brazil is going to be a very unstable market for pharma companies,” he added.
In contrast, Lewis predicted that growth of the US pharmaceutical market will accelerate. He cited both the slow-down in developing markets and growing pharmaceutical company interest in specialty drugs as a major drivers.
Specialty drugs – those that costs more than $600 per month according to the Centers for Medicare & Medicaid Services – are hard to make and difficult to copy, which makes them attractive to manufacturers concerned about potential generic competition.
The challenge is finding patients and payers that can afford them, which is why many specialty drug developers focus on selling them in the US.
In fact, according to Lewis, 60% of the global growth in the specialty drug sales will be seen in the US over the next few years.
The drug industry’s interest in hard to make specialty drugs has reinvigorated R&D according to Lewis, who said: “The developed market, led by the US, has really reinvented innovation.
“In the past five years we’ve seen more innovation in pharma than in the previous 15,” he said, and these recent innovations are having “a gravitational effect.”
“If you’re in in innovation, this is the picture, and it’s all about the United States.”
The *DCAT (Drug, Chemical & Associated Technologies Association) is a not-for-profit, member-supported, global business development association whose unique membership model integrates both innovator and generic drug manufacturers and suppliers of ingredients, development and manufacturing services, and related technologies.