IMS Health estimates that the global pharmaceutical market in 2010 will grow 4-6% on a constant-dollar basis, exceeding $825 billion, driven by stronger near-term growth in the US market.
Global market sales are to grow at a 4-7% compound annual growth rate through 2013, factoring in the impact of the global macro economy, the changing mix of innovative and mature products, and increasing healthcare access and funding on market demand. The global market is expected to exceed $975 billion by 2013. The company’s previous growth forecast was lower by one percentage point.
Murray Aitken, senior vice president of Healthcare Insight at IMS, said: “Overall, market growth is expected to remain at historically low levels, but stronger-than-expected demand in the US is lifting both our short- and longer-term forecasts.
“The economic climate will continue to be a dampening influence in most mature markets, particularly in those countries with rising budget deficits and publicly funded healthcare systems. In the US, pricing flexibility and inventory management actions are contributing to much higher growth than anticipated earlier this year, and are the main reasons for the upward adjustment to our five-year forecast.”
IMS discussed better growth prospects in the US, varying effects of economic downturn, impact of the patent cliff, as some of the market dynamics in its reports.
According to the report, near-term growth prospects in the US have strengthened in recent months due to price increases and changing inventory stocking patterns. Pharmacy chains are more tightly managing their inventory levels based on expectations of patient demand, which has led to greater purchasing volatility than in previous years. This also has played a role in unusually high sales growth in the first quarter of 2009 relative to forecast expectations.
The US market growth in 2009 is now expected to be 4.5-5.5% and 3-5% in 2010. While payers seek to limit price increases and boost the use of lower-cost generics, pharmaceutical manufacturers are expected to maintain their pricing practices, competing on the basis of clinical evidence and value.
Current pricing practices by the industry also include the use of off-invoice discounts and rebates, which are not reflected in IMS’s forecast and reported data, and are understood to be increasing.
Growth has slowed in countries where there is high out-of-pocket spending on pharmaceuticals and steep declines in macroeconomic activity, especially in Russia, Mexico and South Korea. At the same time, growth has been less affected to date in countries where drugs are largely funded publicly, such as in Germany, Japan and Spain. In the US, pharmaceutical manufacturers’ efforts to expand access to and awareness of patient assistance programs, as well as co-pay subsidies for patients in need, are limiting the impact of the economic downturn to some extent.
Pharmerging markets are cited as key in sustaining growth. Despite economic conditions significantly affecting some markets – notably Russia, Turkey, South Korea and Mexico – the seven pharmerging countries are expected in aggregate to grow by 12-14% in 2010, and 13-16% over the next five years. China’s pharmaceutical market will see 20% annual growth, and contribute 21% of overall global growth through 2013. Russia and Turkey may be impacted significantly by new measures intended to reduce the level of healthcare spending in those two markets.
Over the next five years, factors like imposition of price cuts on existing drugs, higher standards to ensure reimbursement of innovative therapies, economic incentives for prescribers and pharmacists to drive a shift to generic alternatives, will affect the market, said IMS Health report.