Global pharma market to cross over $975 billion by 2013 : IMS Health

Rising demand in US market spurs growth; Chinese pharma to grow 20+ % yearly, says IMS Health report

Global pharmaceutical market value is expected to expand to over $975 billion by 2013, says a report from IMS Health Inc- the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries.

Pharmaceutical market worldwide will cross $825 billion next year, growing at the rate of 4 percent to 6 percent, says the latest release of IMS Market Prognosis, the company’s series of strategic market forecasting publications.

Global pharmaceutical market sales to grow at a 4 – 7 percent compound annual growth rate through 2013, driven by stronger near-term growth in the US market.

Pharmaceutical market growth is one percentage point higher than IMS’s previous five-year forecast in April, partly due to the stronger demand being experienced in 2009.

“Overall, market growth is expected to remain at historically low levels, but stronger-than-expected demand in the U.S. is lifting both our short- and longer-term forecasts,” said Murray Aitken, senior vice president, Healthcare Insight, IMS.

The economic climate will continue to be a dampening influence in most mature markets, particularly in those countries with rising budget deficits and publicly funded healthcare systems.

In the U.S., pricing flexibility and inventory management actions are contributing to much higher growth than anticipated earlier this year, and are the main reasons for the upward adjustment to our five-year forecast, Aitken said.

IMS takes into account the impact of the global macroeconomy, the changing mix of innovative and mature products, and the rising influence of healthcare access and funding on market demand, in its report.

Near-term growth prospects in the US have strengthened in recent months, reflecting both sustained levels of price increases and changing inventory stocking patterns. 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. This also has played a role in unusually high sales growth in the first quarter of 2009 relative to forecast expectations.

US market growth in 2009 is now expected to be 4.5 – 5.5 percent, and 3 – 5 percent in 2010.

While payers seek to limit price increases and boost the use of lower-cost generics, pharmaceutical manufacturers are expected to maintain their pricing practices, competing on the basis of clinical evidence and value.

Growth has slowed in countries where there is high out-of-pocket spending on pharmaceuticals and steep declines in macroeconomic activity, especially in Russia, Mexico and South Korea. At the same time, growth has been less affected to date in countries where drugs are largely funded publicly, such as in Germany, Japan and Spain.

However, new cost-containment measures expected to be introduced during the forecast period likely will impact the pace of growth in these markets. In the US, pharmaceutical manufacturers’ efforts to expand access to and awareness of patient assistance programs, as well as co-pay subsidies for patients in need, are limiting the impact of the economic downturn to some extent.

IMS Health forecast expects the next five years to reflect a significant imbalance between new product introductions and patent losses. This is the primary factor limiting global pharmaceutical market growth to the mid-single digits through 2013.

During the next five years, products that currently generate an unprecedented $137 billion in sales are expected to face generic competition, including Lipitor, Plavix, and Seretide. At the same time, new products that will enable innovative approaches for treating patients suffering from diseases such as osteoporosis, respiratory ailments, thrombosis, multiple sclerosis and cancer are not expected to generate the same magnitude of sales as products losing patent protection.

Despite economic conditions significantly affecting some markets – notably Russia, Turkey, South Korea and Mexico – the seven pharmerging countries are expected in aggregate to grow by 12 – 14 percent in 2010, and 13 – 16 percent over the next five years.

China’s pharmaceutical market is expected to continue to grow over 20 percent pace annually, and contribute 21 percent of overall global growth through 2013. Russia and Turkey may be impacted significantly by new measures intended to reduce the level of healthcare spending in those two markets.

The potential for passage of comprehensive healthcare reform in the U.S. as well as legislative or regulatory actions in other countries, the magnitude of the H1N1 pandemic, and the timing and extent of the global economic recovery in 2010  could have a long-term effect on the pharmaceutical market.