The Hindu Business Line : ‘Global pharma market expected to slow down in 2008’

Hit by declining drug treatment costs, pricing issues and loss of patent protection in blockbuster medicines, the global pharmaceutical market is expected to post a slower 5-6 per cent growth in 2008, according to a recent report.

It predicts global pharmaceutical sales to expand to $735-745 billion next year. Sales grew by 6-7 per cent this year, global pharmaceutical market intelligence company IMS Health said.

The sales growth in the US and the five largest European markets in 2008 is expected to be around 4-5 per cent, while the Japanese market is forecast to grow 1-2 per cent next year, down from the 5 per cent posted in 2007.

Key factors limiting growth in these markets include patent expiration on branded products and an associated increase in the use of generics and increased pressure from consumers/regulators to control costs. Heightened safety scrutiny and healthcare legislation is also slowing down the introduction of new medicines, the annual forecast said.

Patent expiry

Drugs with approximately $20 billion in annual sales will face patent expiry in 2008, similar to levels seen over the past two years, with the US seeing the largest proportion of such expiries. Treatment costs per day have already declined 20-40 per cent in 2007 in therapy areas impacted by the loss of market exclusivity for Norvasc, Zocor and Zoloft, IMS Health said. This will be good news for companies manufacturing generics (cheaper versions of branded medicines) as they might grow by 14-15 per cent next year, to more than $70 billion, says the report. Indian pharmaceutical companies represent a major force in the global generics business.

“For the first time, the seven largest markets will contribute just half of the overall pharmaceutical market growth, while seven emerging markets will contribute nearly 25 per cent of growth worldwide,” Mr Murray Aitken, senior Vice-President, Healthcare Insight, IMS, said. This ushers in a major shift in growth in favour of the emerging markets including India, China, Russia and Mexico. 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, IMS Health predicted.

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