For the first time in a decade, EvaluatePharma has amended its long-term sales projections for the pharma industry downwards – thanks to pricing pressure, biosimilars and a dip in novel drug approvals.
The latest edition of its annual World Preview report suggests prescription drug sales will grow at a 6.5% compound annual growth rate through 2022 to reach $1.06trn, with a third of that increase – an additional $95bn – coming from drugs for rare diseases. While that CAGR is described as ‘robust’ it marks a decline from the $1.12trn EP analysts forecast for the same period last year.
Among the brakes on growth will be $194bn in biologic drug sales at risk of biosimilar competition between 2016 and 2022 with EP now predicting 54% sales erosion – a more aggressive estimate than in last year’s report – along with an increase in the cost of bringing new drugs to market which EP now puts at around $4bn per new molecular entity (NME).
Pricing pressure will be the major factor in the coming years says the report, particularly as rare disease therapies – long a haven for premium pricing – are also now coming under scrutiny.
“Although Donald Trump has yet to directly intervene on US drug costs, the threat remains ever present and some pharma companies have announced their own pre-emptive strikes by publicly announcing caps to price hikes,” notes the forward to the document.
It’s not all gloomy however. While FDA approvals dipped sharply to 27 last year from a record high of 56 in 2015, the pace is picking up again (21 in the first five months of 2017) and – if maintained – could reflect a return to more sustainable approval rates. Moreover, the average value of new approvals last year – defined as US sales five years after launch – came in $522m, which is above the average in 2010-2015.
Some sectors are expected to show growth well above average, particularly oncology which is expected to reach a value of $192bn in 2022, with the PD-1/PD-L1 inhibitors accounting for almost $30bn of that total, says EP. It expects Merck & Co’s Keytruda (pembrolizumab) to topple Bristol-Myers Squibb’s Opdivo (nivolumab) as the top-selling drug in that class by that year.
As it stands Novartis, Pfizer and Roche are competing head to head for the crown of being the largest company by worldwide prescription sales in 2022, with Novartis seeming to have a slight edge although EP notes suggest that a single product failure could change the order on the podium.
And the two projects that will potentially most valuable by that date? Biogen’s aducanumab for Alzheimer’s disease – although clearly a high-risk candidate – and Johnson & Johnson’s prostate cancer therapy apalutamide, which is due to be filed later this year.