"In several respects, 2008 marks an important inflection point for the global pharmaceutical market," avers Murray Aitken, senior vice president, Healthcare Insight, IMS. "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 $370 - 380 billion 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", he adds.
By next year, IMS expects drug treatment costs to dip in several major therapy areas where leading products have lost or will lose patent protection and when generic drugs capture significant market share. Among this, lipid regulators, calcium channel blockers, selective serotonin reuptake inhibitors, osteoporosis therapies and proton pump inhibitors are listed. The dip will be most significant in the US market where treatment costs per day have declined 20 40 per cent in 2007 in therapy areas affected by the loss of market exclusivity for Norvasc, Zocor and Zoloft.
"These treatment cost declines are expected to continue through next year," says Aitken. He notes that in the case of osteoporosis therapies and proton pump inhibitors, the expected entry of generics competition for Fosamax and Protonix is likely to result in 10 - 25 per cent reductions in drug treatment costs in these classes in 2008.
In its forecast of 2008, IMS pins down the following key market dynamics:
• Growth contribution from top seven markets falls. In the US and the five largest European markets, sales growth in 2008 is expected to range from 4 - 5 per cent. This marks a historic low for the US. Japan market growth is forecast to grow 1-2 per cent next year, down from the 4- 5 per cent pace expected in 2007
• "Pharmerging" market growth accelerates. The seven "pharmerging" markets of China, Brazil, Mexico, South Korea, India, Turkey and Russia are expected to grow 12 - 13 per cent next year, to $85 - 90 billion. In these markets, there is significantly greater access both to generic and innovative new medicines 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 shift the focus away from infectious diseases and toward cardiovascular, diabetes and other chronic illnesses, as is happening now.
• Wave of genericization continues. Drugs with approximately $20 billion in annual sales will face patent expiry in 2008, similar to levels seen over the past two years. In 2008, more than two-thirds of all prescriptions written in the US are expected to be for generics. New government contracting initiatives in Germany, and educational programs in Japan, Spain and Italy, will drive greater generics use in those markets. Also, generics competition within the biotech sector will rise as the biosimilar epoeitin alfa is marketed across Europe.
• Patient use of innovative specialty products expands. IMS anticipates up to 29 innovative new medicines will be launched in 2008 - 80 percent of which will be primarily prescribed by specialists. These include four new oncology drugs for treating melanoma, prostate cancer and acute myeloid leukaemia.
• Increased use of evidence supporting the value of medicines. Pharmaceutical companies, governments and other payers are using more sophisticated economic analyses to understand the impact of pharmacotherapies on healthcare budgets worldwide.
• 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.
• Intellectual property rights challenged on multiple fronts. Intellectual property issues under review in 2008 potentially could have significant long-term effects on patent-holders.
"These indicators paint the stark reality of a marketplace in transition," says Aitken. "The actions being taken by companies to reinvent themselves will need to continue at an accelerated pace. Today, commercial strategies and tactics are being re-assessed to better align with future opportunities, while portfolio strategies are being adjusted to capture growth in emerging markets and reflect shifts in product values. In this market environment, building relationships directly with patients as they become better educated and take a more active role in their own healthcare also is essential. And, the industry must continue engaging the broader healthcare community in a rational and positive dialogue about the delivery of higher-quality healthcare to patients at lower cost", he concludes.