The global market for pharmaceuticals is expected to grow nearly $300 billion over the next five years, reaching $1.1 trillion in 2014.
Norwalk, Conn.-based IMS Health says that a compound annual growth rate of 5 percent to 8 percent during this period reflects the impact of leading products losing patent protection in developed markets, as well as strong overall growth in the world’s emerging countries.
Global pharmaceutical sales growth of 4 percent to 6 percent is expected this year, according to IMS, which is consistent with prior forecasts. In 2009, the market grew 7 percent, to $837 billion, compared with a 4.8 percent growth rate in 2008.
“Patient demand for pharmaceuticals will remain robust, despite the ongoing effects of the economic downturn being felt in many parts of the world,” said Murray Aitken, IMS' senior vice president of healthcare insight. “In developed markets with publicly funded healthcare plans, pressure by payers to curb drug spending growth will only intensify, but that will be more than offset by the ongoing, rapid expansion of demand in the ‘pharmerging’ markets.”
The “pharmerging” countries are expected to grow at a 14 percent to 17 percent pace through 2014, while major developed markets will grow 3 percent to 6 percent.
Net growth over the next five years is expected to be strong, Aitken said, even as the industry faces the peak years of patent expiration for innovative drugs introduced 10-15 years ago and subsequent entry of lower-cost generic alternatives. Over the next five years, products with sales of more than $142 billion are expected to face generic competition in major developed markets.
Publicly funded health systems are under pressure to reduce growth in drug budgets following the global economic downturn. Countries such as Turkey, Spain, Germany and France already have announced plans to apply across-the-board restrictions on access or reductions in reimbursements to reduce drug spending growth.
“The expected global economic recovery removes an element of uncertainty for the industry over the next five years, although the way payers address lingering budget deficits will remain an issue in many markets,” said Aitken. “Health system reforms, such as those to be implemented in the U.S., can spur fundamental change in the market – but the full impact may not be felt until the latter half of this decade.”
Leading up to 2020, IMS expects to see a continuing shift toward biopharmaceuticals, specialty-driven products and changes in the mix of disease areas of interest, he said.