Slower Growth Seen for Global Pharmaceutical Market

Fairfield, CT (Oct. 24)-Growth in the global pharmaceutical market is expected to slow in 2007, based on the industry's increasing reliance on niche and specialty products and greater generic drug penetration. Generic drugs, along with biotechnology and specialist-initiated products, are expected to outperform the overall market in 2007. And, growth in the United States and Europe will slow, while growth in emerging countries, including China, is projected in the double digits.

The global pharmaceutical market is expected to increase 5–6% in 2007* compared with 6–7% in 2006, according to IMS Health (Fairfield, CT, www.imshealth.com). Global pharmaceutical sales are expected to reach $665–685 billion in 2007. 

“In 2007, the market still will be absorbing changes that have defined a new economic reality, one in which growth is shifting from mature markets to emerging ones; new product adoption is not keeping pace with the loss of patent protection by established products; specialty and niche products are playing a larger role; and regulators, payers and consumers are more carefully weighing the risk/benefit factors of pharmaceuticals,” says Murray Aitken, senior vice-president of corporate strategy, IMS. 

The number of new product launches in 2007 is expected at 25–35, which is comparable with this year’s expected 30 launches. The total number of blockbuster products is expected to reach 112 in 2007, up from 94 in 2005.

Specialty products and generic drugs, however, will affect the gains from new products. IMS comments that new products are contributing less to overall market expansion than they have in the past as pharmaceutical companies increasingly develop specialty products and treatments to serve niche markets. In addition, generic drug competition looms large. In 2007, marketed products with a value of $16+ billion will likely lose patent protection, which is in addition to the $23 billion of products that lost protection in 2006, notes IMS.

Generics are expected to perform at a stronger clip than the overall market, with growth of 13–14% in 2007, estimates IMS. Two other sectors­, biotechnology products and specialist-initiated products, also are expected to see high levels of demand in 2007, with estimated growth of 13–14% and 10–11%, respectively.

Growth in US and Europe Slows

In the United States, pharmaceutical market growth is projected to slow to 4–5% in 2007, compared with 6–7% in 2006, says IMS. The loss of patent protection for several key products, valued at $10 billion, will affect the US market in 2007; this loss follows the patent expiry of $19 billion in branded products in 2006. "Growth from new products will not be sufficient to offset the volume of branded drugs that shift to generics," says IMS.

Slowing US pharmaceutical growth in 2007 continues a trend over the past several years. The US market, will contribute roughly 36% of total global market growth in 2007, significantly less than the 54% it contributed five years earlier, according to IMS.

In Europe, the top five markets (France, Germany, the United Kingdom, Italy, and Spain) combined are projected to grow 3–4% in 2007, down from the 4–5% in 2006.

Japan's pharmaceutical market is projected to grow 5–6% in 2007, up from an estimated 1–2% in 2006.   

Emerging markets, including China, India, Brazil, and Turkey, are experiencing pharmaceutical growth in excess of 10% in 2006, and similar growth is projected in 2007. China's pharmaceutical market is expected to increase 15–16% and reach $15–16 billion in 2007. 

* The data in the IMS analysis measures growth in constant dollars; sales are calculated at the ex-manufacturer level.