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Emerging markets add more to global pharma market growth

The global pharmaceutical market will grow at a five to six per cent rate in 2008, compared with six to seven per cent in 2007, according to IMS Health

The global pharmaceutical market will grow at a five to six per cent rate in 2008, compared with six to seven per cent in 2007, according to IMS Health's 2008 Global Pharmaceutical Market and Therapy Forecast.

The forecast predicts global pharmaceutical sales to expand to USD 735bn to USD 745bn in 2008.

In 2008, IMS expects drug treatment costs to decline in several major therapy areas where leading products have lost or will lose patent protection, and as generic drugs capture significant market share.

The affected drugs include lipid regulators, calcium channel blockers, selective serotonin reuptake inhibitors, osteoporosis therapies and proton pump inhibitors. Decline is greatest in the US market, where daily treatment costs have declined between 20 and 40 per cent in 2007. Pfizer's Norvasc (amlodipine) and Zoloft (sertraline) and Merck & Co's Zocor (simvastatin) have been the hardest hit.

Murray Aitken, senior vice-president of IMS Healthcare Insight, said: "In several respects, 2008 marks an important inflection point for the global pharmaceutical market. For the first time, the seven largest markets will contribute just half of overall pharmaceutical market growth, while seven emerging markets will contribute nearly 25 per cent of growth worldwide.

"And, as the impact of established pharmaceuticals losing patent protection accelerates, we will see a decline for the first time in the size of the USD 370bn to USD 380bn audited market for primary care-driven drugs. In the coming year, biopharmaceutical and generics companies will more aggressively adjust their business models to manage through these inflections, capturing new opportunities in this changing market environment," added Aitken.

Top seven markets contribute less to growth
In the US and the five largest European markets, sales growth in 2008 is expected to range from four to five per cent. This marks a historic low for the US.

Japanese market growth is forecast to grow between one and two per cent next year, down from the four to five per cent rate expected in 2007. Key factors limiting growth in these markets include a levelling off of growth from the introduction of the Medicare Part D prescription drug benefit in the US, patent expiration of branded products and an associated increase in the use of lower-cost generics.

Other factors for Japan include increased pressure from payers to control costs and limit access to certain treatments, as well as heightened safety scrutiny and healthcare legislation that is slowing, and in some cases halting, the introduction of new medicines.

Growth in emerging markets accelerating
The seven "pharmerging" markets of China, Brazil, Mexico, South Korea, India, Turkey and Russia are expected to grow between 12 and 13 per cent in 2008, to between USD 85bn to USD 90bn.

There is significantly greater access both to generic and innovative new medicines in these markets, as primary care improves and becomes more available in rural areas, and as private health insurance becomes more commonly held. Ongoing economic growth in the developing world will continue to shift the focus away from infectious diseases and toward cardiovascular, diabetes and other chronic illnesses.

Pharmacoeconomics becomes even more important
Pharmaceutical companies, governments and other payers are using more sophisticated economic analyses to understand the impact of pharmacotherapies on healthcare budgets worldwide.

Health Technology Assessment (HTA) bodies at a national and regional level are growing in scope and influence across Europe. In the US, The Centers for Medicare & Medicaid Services (CMS) is expected to more aggressively seek demonstrable proof that it is receiving "value for money" from Medicare Part D and other government-funded programmes.

IMS also expects an increased willingness by payers and drug manufacturers to enter into "payment for results" arrangements, especially in the area of oncology.

Safety issues increase level of uncertainty
Throughout 2008, IMS expects both more independent meta-analysis of broadly used drugs, and a move toward risk assessment based not only on scientific evidence, but also the views of legislators and juries.

In the US, the FDA has established a Risk Communication Committee, a new arm designed to improve risk communication to the public. The agency will make critical decisions in 2008 around post-marketing surveillance approaches in light of the provisions of the FDA Amendments Act of 2007, designed to enhance the agency's ability to safeguard and improve public health.

IMS anticipates more limited claims for newly approved medicines, the application of more "black box" warnings on labels, more clinical evidence required by regulators, and slower approvals. Overall, this raises the level of uncertainty faced by companies, as well as their ability to make products available to patients.

30th September 2008


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