IMS Raises Global Pharma Market Growth Forecast

IMS Health delivered some good news last week with its updated pharmaceutical market forecast. The market-research firm expects the global pharmaceutical market to grow 4–6% in 2010, reaching more than $825 billion. Looking ahead to 2013, industry can expect a 4–7% annual growth rate, reaching more than $975 billion. This forecast represents a 1% increase in IMS’s five-year global market estimates released earlier this year.

“While our outlook for the global market is more positive than earlier in the year, the fundamental dynamics of the innovation cycle, funding pressures, and the broader macroeconomic environment will result in mid-single-digit growth over the next five years,” said Murray Aitken, senior vice-president of Healthcare Insight at IMS in an Oct 7, 2009 press release. “Notwithstanding the improved prospects in the US market, the drive by pharmaceutical manufacturers to adapt to the longer-term marketplace trends and evolving patient needs will continue undiminished.”

Recent near-term growth prospects in the US provided a major reason for the new, increased forecast. “Pharmacy chains are more tightly managing their inventory levels based on expectations of patient demand, which has led to greater purchasing volatility than in previous years,” says the IMS release. “This also has played a role in unusually high sales growth in the first quarter of 2009 relative to forecast expectations.”

Also driving global pharmaceutical market growth, says IMS, is “the changing mix of innovative and mature products, and the rising influence of healthcare access and funding on market demand.”

Other major points from the new IMS report include:

• The seven pharmerging countries (Brazil, Russia, India, China, Mexico, Russia, and Turkey) are expected to grow together 12–14% percent in 2010, and 13–16 % during the next five years, with China holding the lead. That said, growth has slowed in markets such as Russia, Mexico, and South Korea where there is “high out-of-pocket spending on pharmaceuticals and steep declines in macroeconomic activity.” And growth has been less affected in countries like Germany, Japan, and Spain were drugs are largely publicly funded.

• US manufacturers have played a role in lessening the impact of the global economic downturn throughout the pharmaceutical industry with its “efforts to expand access to and awareness of patient assistance programs, as well as co-pay subsidies for patients in need.”

• The primary factor limiting global pharmaceutical market growth remains the “significant imbalance between new product introductions and patent losses.”

Looking to 2010, IMS notes that its forecast could change again based on pending healthcare reform, the H1N1 pandemic, and the pace of recovery of the economic downturn.