IMS Health has reported that the size of the global market for pharmaceuticals is expected to grow nearly US$300 billion over the next five years, reaching US$1.1 trillion in 2014. The 5 - 8 % compound annual growth rate during this period reflects the impact of leading products losing patent protection in developed markets, as well as strong overall growth in the world’s emerging countries.
Global pharmaceutical sales growth of 4 - 6 % is expected this year, consistent with IMS’s prior forecast. In 2009, the market grew 7.0% to $837 billion, compared with a 4.8% growth rate in 2008.
“Patient demand for pharmaceuticals will remain robust, despite the ongoing effects of the economic downturn being felt in many parts of the world,” said IMS’s Murray Aitken, senior vice president, Healthcare Insight. “In developed markets with publicly funded healthcare plans, pressure by payers to curb drug spending growth will only intensify, but that will be more than offset by the ongoing, rapid expansion of demand in the pharmerging markets. Net growth over the next five years is expected to be strong — even as the industry faces the peak years of patent expiries for innovative drugs introduced 10 - 15 years ago and subsequent entry of lower-cost generic alternatives.”
In its latest analysis, IMS identifies the following key market dynamics:
Geographic balance of the pharmaceutical market continues to shift towards pharmerging countries
Pharmerging markets are expected to grow at a 14 - 17% pace through 2014, while major developed markets will grow 3 - 6%. As a result, the aggregate growth through 2014 from pharmerging markets will be similar to the growth experienced in developed markets — about US$120 - US$140 billion. This compares to aggregate growth over the past five years of US$69 billion in pharmerging markets and US$126 billion in developed markets. The U.S. will remain the single largest market, with 3 - 6 percent growth expected annually in the next five years and reaching US$360 - $390 billion in 2014, up from US$300 billion in 2009.
Therapy area growth dynamics driven by innovation cycle and areas of unmet need
Global pharmaceutical sales growth of 4 - 6 % is expected this year, consistent with IMS’s prior forecast. In 2009, the market grew 7.0% to $837 billion, compared with a 4.8% growth rate in 2008.
“Patient demand for pharmaceuticals will remain robust, despite the ongoing effects of the economic downturn being felt in many parts of the world,” said IMS’s Murray Aitken, senior vice president, Healthcare Insight. “In developed markets with publicly funded healthcare plans, pressure by payers to curb drug spending growth will only intensify, but that will be more than offset by the ongoing, rapid expansion of demand in the pharmerging markets. Net growth over the next five years is expected to be strong — even as the industry faces the peak years of patent expiries for innovative drugs introduced 10 - 15 years ago and subsequent entry of lower-cost generic alternatives.”
In its latest analysis, IMS identifies the following key market dynamics:
Geographic balance of the pharmaceutical market continues to shift towards pharmerging countries
Pharmerging markets are expected to grow at a 14 - 17% pace through 2014, while major developed markets will grow 3 - 6%. As a result, the aggregate growth through 2014 from pharmerging markets will be similar to the growth experienced in developed markets — about US$120 - US$140 billion. This compares to aggregate growth over the past five years of US$69 billion in pharmerging markets and US$126 billion in developed markets. The U.S. will remain the single largest market, with 3 - 6 percent growth expected annually in the next five years and reaching US$360 - $390 billion in 2014, up from US$300 billion in 2009.
Therapy area growth dynamics driven by innovation cycle and areas of unmet need
As the pharmaceutical industry’s research and development programs adjust to the broad availability of low-cost generic options in many chronic therapy areas, higher growth will occur in those therapy areas where there is significant unmet clinical need, high-cost burden of disease, and innovative science that can bring new treatment options to patients. In the areas of oncology, diabetes, multiple sclerosis and HIV, annual growth is expected to exceed 10% through 2014 as new drugs are brought to market, patient access is expanded and funding is redirected from other areas where lower-cost generics will be available.
Broad cuts in spending applied by public payers to reduce growth in drug budgets
Publicly funded health systems are under increased pressure to reduce growth in drug budgets following the global economic downturn. Countries including Turkey, Spain, Germany and France already have announced plans to apply across-the-board restrictions on access or reductions in reimbursements to reduce drug spending growth. Governments in other countries seeking to restore fiscal balance may take similar actions, or shift more costs to patients.
Broad cuts in spending applied by public payers to reduce growth in drug budgets
Publicly funded health systems are under increased pressure to reduce growth in drug budgets following the global economic downturn. Countries including Turkey, Spain, Germany and France already have announced plans to apply across-the-board restrictions on access or reductions in reimbursements to reduce drug spending growth. Governments in other countries seeking to restore fiscal balance may take similar actions, or shift more costs to patients.
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