US Drug Market To Shrink In 2009, Global Growth Slowing -IMS
April 22 2009 - 4:30PM
Dow Jones News
In an ominous sign for drug makers, an influential research firm
expects the U.S. pharmaceutical market to contract this year for
the first time in more than 50 years because of the deterioration
of the economy.
IMS Health Inc. (RX), Norwalk, Conn., reduced its worldwide
forecast of pharmaceutical sales this year by 8.5% from its outlook
six months ago,
People have curtailed visits to doctors' offices, and fewer are
starting new therapies for chronic conditions such as diabetes,
hypertension, insomnia and depression, according to Murray Aitken,
senior vice president of health-care insight at IMS. Increased use
of cheaper, generic drugs also has softened overall sales
growth.
Signs of pharmaceutical sales weakness were evident in
first-quarter financial reports issued in the past week by
GlaxoSmithKline PLC (GSK), Johnson & Johnson (JNJ), Abbott
Laboratories (ABT), Merck & Co. (MRK) and Schering-Plough Corp.
(SGP).
The trends should force drug makers to make significant changes,
Aitken told reporters on a conference call, including expanding
into emerging markets and raising the bar for developing new
drugs.
"It's much more difficult now if you are not a very innovative
product with a very strong clinical profile to be launching into a
therapy area where leading generics are available, and expect to
get a first-line position," he said.
IMS sees 2009 global pharmaceutical sales of more than $750
billion, down from the more than $820 billion the company had
predicted in October. With currency fluctuations stripped out, the
new forecast implies market growth of 2.5% to 3.5% for 2009, down
from a prior forecast of 4.5% to 5.5%.
In the U.S., the biggest market for prescription drugs, IMS sees
pharmaceutical sales declining by 1% to 2% to between $280 billion
and $290 billion in 2009, which would be the first contraction in
the 52 years that IMS has been tracking the market. IMS previously
predicted slight U.S. market growth for 2009.
Looking ahead, a potential economic recovery and changes in U.S.
health-care policies could help bolster demand for pharmaceuticals
after this year. But mitigating growth will be another wave of
patent expirations for blockbuster brands in 2011 and 2012,
including Pfizer Inc.'s (PFE) Lipitor cholesterol drug and the
Plavix anti-clotting drug from Sanofi-Aventis (SNY) and
Bristol-Myers Squibb Co. (BMY).
IMS sees a global compound annual growth rate of 3% to 6%
through 2013. But in the U.S., the overall five-year growth rate
will be essentially flat, IMS said.
In other major markets - Japan, France, Germany, Italy, the
U.K., Spain and Canada - IMS sees average annual pharmaceutical
sales growth of 1% to 4%.
Higher growth is expected in emerging markets, with IMS
predicting average annual growth of 13% to 16% for seven countries
including China. IMS sees China becoming the third largest
pharmaceutical market by 2011, versus sixth place today.
Despite the pressures, there's still room for new drug launches
and potential blockbusters. IMS expects about 50 to 60 original new
drugs to be launched in the next two years.
Many will be aimed at niche uses and narrow patient populations.
But IMS also expects six to 10 potential blockbusters to be
launched this year and next, including the prasugrel anti-clotting
drug in the U.S. from Eli Lilly & Co. (LLY) and Daiichi-Sankyo
Co. (4568.TO); J&J's ustekinumab anti-inflammatory drug in the
U.S.; Novo Nordisk A/S's (NVO) liraglutide diabetes drugs;
Novartis' (NVS) meningitis vaccine Menveo; and Amgen's (AMGN)
denosumab osteoporosis drug.
Some of these products already have been approved outside the
U.S.
-Peter Loftus; Dow Jones Newswires; 215-656-8289;
peter.loftus@dowjones.com