IMS Health estimates that global pharmaceutical sales reached $643 billion in 2006.Driven by growth in emerging markets, global pharmaceutical sales rose 7 percent and reached $643 billion last year, according to executives at IMS Health. At the same time, however, patent expirations and growing concerns over the high-cost of medicine, could dampen growth in the future. IMS announced the results of its latest study during a press conference in New York. In recent years, the IMS presentation has become one of the most popular events of DCAT Week, which was held March 19-23 at the Waldorf-Astoria in New York.The growth was even stronger in the U.S., where sales increased 8.3 percent, fueled by an increase in prescribing volume due to Medicare Part D and innovations in oncologics that drove strong 20.5% global growth in that therapeutic class, were key contributors to the market’s expansion.“We continue to see a shift in growth in the marketplace away from mature markets to emerging ones, and from primary care classes to biotech and specialist-driven therapies,” said Murray Aitken, IMS senior vice president, corporate strategy. “Oncology and autoimmune products increasingly are demonstrating their value in answering unmet patient needs — offering significant opportunities for growth.”In 2006, specialist-driven products contributed 62 percent of the market’s total growth, compared with just 35 percent in 2000. A number of primary care classes are experiencing slowing or below market-average growth due to the entry of lower-cost, high-quality generics and switches to over-the-counter products. These classes include proton pump inhibitors (PPIs), antihistamines, platelet aggregation inhibitors, and antidepressants. Last year, generics represented more than half of the volume of pharmaceutical products sold in seven key world markets — U.S., Canada, France, Germany, Italy, Spain, and the U.K. This trend reflects the changing balance between new and old products and the growing “genericization” of many primary care categories.
Pipeline Remains StrongIn 2006, pharmaceutical growth continued to be driven by increased longevity of populations, strong economies and innovative new products. Last year, 31 new molecular entities were launched in key markets. Overall, the contribution to global market growth by products launched from 2001 to 2005 reached $13.5 billion in 2006.Notable high-potential product launches in 2006 included Gardasil, the first vaccine to prevent cervical cancer; Januvia, the first-in-class oral for Type II diabetes; and Sutent for renal cancer.“There have been some exceptional advances in medicine, but public policy will continue to be the greatest influence in driving decisions on healthcare spending,” said Aitken. “To garner support for innovative new drugs, the industry needs to better articulate the value of its medicines — demonstrating and quantifying the ability of therapies to reduce total healthcare costs, increase economic productivity, improve the quality of life and extend life itself.”Growth in the R&D pipeline remains strong, especially in the number of products in Phase I and Phase II clinical development. At the end of 2006, some 2,075 molecules were in development, up 7 percent from 2005 levels, and up 35 percent from the end of 2003. In addition, a promising range of drugs are now in Phase III clinical trials or pre-approval stage, including 95 oncology products, 40 for viral infections and HIV, and 27 for arthritis/pain. Of the total pipeline, 27 percent of these products are biologic in nature.
Leading Therapy ClassesAmong audited therapy classes, the top-ranked lipid regulators class increased 7.5 percent to $35.2 billion, despite patent loss from simvastatin and pravastatin in major markets. New generics entries, growth of innovative products such as Crestor and Vytorin, and the increasing demand for lipid regulators among Medicare Part D patients in the U.S. continued to drive volume gains for this class. Oncologics reached $34.6 billion in sales in 2006, up 20.5 percent. This significant growth, the highest among the top ten therapeutic classes, was fueled by strong acceptance of innovative and effective therapies that are reshaping the approach to cancer treatments and outcomes. In 2006, innovation in oncology was particularly active, with more than 380 compounds in development. Half of the oncology products in late-stage development are targeted therapies — treatments directed at specific molecules involved with carcinogenesis and tumor growth.“Targeted therapies have revolutionized the way cancer is being treated —opening up the possibility that many forms of the disease can be fought through long-term maintenance therapy,” said Titus Plattel, vice president, IMS Oncology. “These therapies are helping to win individual battles against cancer, enabling us to think of it as a chronic illness, rather than a life-ending one. With the industry’s innovation and ongoing scientific advances, growth in targeted therapies will continue to be very strong and the outcomes even more impressive.”Respiratory agents were the third-largest therapy class last year, with 10 percent growth in sales to $24.6 billion. Another therapeutic class experiencing high growth was autoimmune agents, which grew at a 20 percent pace in 2006 to $10.6 billion in sales. Ranked twelfth in size among leading classes, growth in autoimmune agents was fueled by the increased use of anti-TNF agents such as Remicade and Humira and the expansion of approved indications for these products.
Regional PerformanceIn 2006, North America, which accounts for 45 percent of global pharmaceutical sales, grew 8.3 percent to $290.1 billion, up from 5.4 percent the previous year. This strong growth was due to the impact in the U.S. of the first year of the Medicare Part D benefit and the resulting increase in prescribing volume, as well as solid 7.6 percent growth in Canada. The five major European markets (France, Germany, Italy, Spain and the U.K.) experienced 4.4 percent growth to $123.2 billion, down from 4.8 percent growth in 2005, the third year of slowing performance. Sales in Latin America grew 12.7 percent to $33.6 billion, while Asia Pacific (outside of Japan) and Africa grew 10.5 percent to $66 billion.Japan experienced a 0.4 percent decline from a year earlier, to $64.0 billion, the result of the government’s biennial price cuts. Pharmaceutical sales in China grew 12.3 percent to $13.4 billion in 2006, compared with a 20.5 percent pace the prior year. This slowdown in growth was due to the government’s introduction of a campaign to limit physician promotion of pharmaceuticals. India was one of the fastest growing markets in 2006, with pharmaceutical sales increasing 17.5 percent to $7.3 billion.“Last year, India transitioned from a ‘developing’ market to an emerging one, with many multi-national pharmaceutical companies tapping into the huge potential this market offers,” said Ray Hill, IMS’s general manager, Global Consulting. “Several factors, including the acceptance of intellectual property rights, a robust economy and the country’s burgeoning healthcare needs have contributed to accelerated growth in that country.”Overall, 27 percent of total market growth is now coming from countries with a per-capita Gross National Income of less than $20,000. As recently as 2001, these lower-income countries contributed just 13 percent of growth.
Looking AheadDespite continued expansion of the pharmaceutical market, underlying dynamics continue to alter the landscape. In 2006, products with sales in excess of $18 billion lost their patent protection in seven key markets — including the U.S., which represents more than $14 billion of these sales. With high uptake of lower-cost therapies replacing branded products in classes such as lipid regulators, antidepressants, platelet aggregation inhibitors, antiemetics and respiratory agents, generics will assume a more central role as payers seek to restrict the growth of healthcare expenditures. Another factor influencing the market is the increasingly active role of patients as they take charge of their health and demand greater access to therapies that will improve or prolong their lives. “We are seeing a critical shift in power in healthcare to emerging stakeholders — most notably, patients who are becoming savvy co-managers of their own health,” observed Aitken. “Because they are both consumers and ultimate payers, they are gaining the power to compel regulatory approvals, influence market access decisions, and sway prescribing behavior.”These shifts are placing new demands on pharmaceutical and biotech companies of all sizes. The most successful manufacturers will be those that focus on payers and patients, without losing perspective on the crucial role of physicians.Said Aitken, “To sustain growth, pharmaceutical companies need to stay ahead of the dynamics that are rebalancing the marketplace worldwide. This requires a sharper focus on realizing productivity gains from their sales, marketing and launch investments, a comprehensive assessment of their R&D and portfolio strategies to support opportunities in both emerging and mature markets, and a commitment to better demonstrate the value of their medications among key stakeholders.”
About IMSOperating in more than 100 countries, IMS Health is the world's leading provider of market intelligence to the pharmaceutical and healthcare industries. With $2.0 billion in 2006 revenue and more than 50 years of industry experience, IMS offers leading-edge market intelligence products and services that are integral to clients' day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and consumer health offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. Additional information is available at http://www.imshealth.com.
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