09 November 2008
URCH Publishing provides a review of the global pharmaceutical market in 2008
US growth falls behind Europe as patent expiries bite
Blockbusters continue to dominate the global market by value
Strong sales growth of new products and a significant market increase in emerging pharmaceutical markets were behind the global pharmaceutical market's healthy CAGR of 10% between 1999 and 2007. In 2007, the 10.7% year-on-year growth was mainly supported by the substantial increase of the European market which surged ahead of the U.S. in market growth terms due to loss of patent protection and subsequent generic competition for several key brands in this territory, says URCH's annual review report Pharmaceutical Market Trends, 2008-2012.
Loss of Patent Protection Sees U.S. Pharmaceutical Market Growth Fall behind Europe
The regions of North America, Europe and Japan accounted for nearly 80% of the world's pharmaceutical market in 2007, and recorded growth of 10.7%. However, the U.S. market growth rate of 4.3% to reach $287 billion declined from 2006's solid 9.1% growth. The fall was a result of the loss of a number of blockbuster retail drugs losing patent protection and subsequent generic competition for several key brands. In contrast, the European pharmaceutical market recorded growth of 13.3% to reach $206 billion, with France, Germany and the UK together accounting for almost 50% of all European pharmaceutical sales.
Meanwhile, the Japanese pharmaceutical market grew by 3.2% in 2007 to $58.5 billion. Following the initial impact of 2006 price cuts the Japanese pharmaceutical market has recovered to deliver positive growth in 2007, boosted by the recent Japanese launch of several blockbuster biologics.
In the U.S., next year's outlook may be the worse, as the recent economic slowdown is expected to hit drug companies in the pocket. Bloomberg1 speculated that a difficult economy could cost as much as $10 billion in revenue in 2009 as sales of prescription drugs are expected to increase at their slowest rate on record. Any recession is expected to drive more patients to switch to generic alternatives, split pills and make fewer trips to the doctor. As a result, sales of drugs are projected to increase as little as 1% to $292 billion. Companies are already taking action by cutting headcount and rationalising operations. For example, Pfizer has cut 14,000 jobs since 2006 to help save $2 billion in annual costs and simultaneously looked outside of the U.S. for growth by increasing its presence in Asian cities with the hope of generating an additional $3 billion by 2012.
Global Pharmaceutical Market 1999-2007
Source: IMS Health
100 drugs account for over a third of the pharmaceutical market in 2007
2007 saw the list of products achieving blockbuster status grew by 17 from 100 to 117, topped by Pfizer and Astella's Lipitor with huge sales of $13.5billion. The top 100 of these achieved total sales in excess of $252.5billion which represented 35.5% of the global pharmaceutical market, marginally down on 2006 when the figure was 36%. Remarkably, nearly half this figure (14.3%) was accounted for by the top 20 drugs alone, each of which achieved sales over and above $3billion.
Seven of these blockbusters drugs managed to achieve a sales growth of more than 50% in a single year. Taking over from cytostatic product Herceptin, as the standout drug in terms of increased revenue, was the blood agent Plavix, marketed by Sanofi-Aventis and Bristol-Myers Squibb, which grew 33.4% to $8.1 billion. The manufacturer with the highest number of blockbuster products was GlaxoSmithKline with an impressive 12, taking it ahead of AstraZeneca, with which it was tied in 2006, The latter maintained its 2006 total of 11 blockbuster products.
The therapy areas that had the most blockbuster drug sales were antineoplastics/immunomodulator, cardiovascular and CNS, which together account for 55.7% of total blockbuster sales in 2007. Leading the CNS blockbuster product segment of $43.3 billion, was Eli Lilly's Zyprexa, with sales of $4.8 billion.
There were a total of 16 cardiovascular blockbuster products in 2007, with combined sales amounting to $49.6 billion. The slow growth of 2.7% in this market was primarily a result of the negative sales impact of increased generic competition for several leading antihypertensives and dyslipidemics.
With a total of 10 alimentary/metabolism blockbuster products in 2007, amounting to combined sales of $28.4 billion, this market recorded a 10.2% market growth, primarily driven by an increase in the antidiabetics drug class. The leading alimentary/metabolism product was AstraZeneca's Nexium (esomeprazole), with sales of $5.2 billion.
CNS therapy class biggest by market share
Overall, the CNS therapy area had the greatest market share (16.5%) followed by the cardiovascular class with a 15.4% share. Other key therapy areas included alimentary/ metabolism (12.1%), antineoplastics/immunomodulatory (10.9%), anti-infectives (10.0%) and respiratory (6.7%). The leading product class by total pharmaceutical sales in 2007 was oncologics with $41.4 billion. Significantly, oncologics, angiotensin-II inhibitors and respiratory agents generated the greatest year-on-year growth. Among other leading product classes lipid regulators and respiratory agents were found.
References
1. Drugmakers May Lose $10 Billion in Sales From Economic Crisis 29 Oct 2008, Bloomberg.com
