Global pharmaceutical market outlook: 2015
IMS Health quantifies the impact of multiple dynamics and
examines the spending and usage of medicines in 2015, globally and for specific
therapy areas and countries
The future level of global spending on medicines has implications for healthcare
systems and policy makers across developed and emerging economies. Key decision
makers share the common goals of improving health outcomes, while controlling
costs and expanding access to more of their citizens.
Past spending growth offers few clues to the level of growth to expect through
2015. Unprecedented dynamics are at play including historically high
levels of patent expiry, rapid expansion of demand for medicines in the world's
fastest growing economies, fewer new medicines reaching patients, and more moderate
uptake of those that do become available. These dynamics are driving rapid shifts
in the mix of spending between branded products and generics; and between spending
in the major developed countries and those 17 high growth emerging countries
referred to as 'pharmerging'.
Through this report, IMS Health has attempted to quantify the impact of these
dynamics and examine the spending and usage of medicines in 2015, globally and
for specific therapy areas and countries.
Global market scenario
Shifting Pattern in Global Market
2005 - 2015
Spending on medicines which was estimated at $856 billion
in 2010, is expected to reach nearly $1,100 billion in 2015, reflecting a slowing
growth rate of three-six per cent over the five year period compared to 6.2
per cent annual growth over the past five years. (See graph: Shifting pattern
in global markets: 2005-2015)
A distinct shift is also expected in the market shares across
the globe, with the US share of global spending declining from 41 per cent in
2005 to 31 per cent in 2015, along with the share of spending from Europe declining
from 27 per cent to 19 per cent over the same period. Meanwhile, 17 high growth
emerging markets (pharmerging) including China, India, Brazil, Russia and Mexico
will contribute 28 per cent of total spending by 2015, up from only 12 per cent
Spending by Segment
The next five years will also see an accelerating shift in
spending toward generics, rising to 39 per cent of spending in 2015, up from
20 per cent in 2005. (See pie charts: Spending by segment)
On the other hand, share of patented brands which accounted
for nearly 70 per cent of global pharmaceutical spending in 2010 are expected
to decline to 53 per cent in 2015, on account of patent expiries, mainly in
the developed markets.
Rapid growth in pharmerging markets is largely from spending
on generic drugs which will contribute to the rise in the generic share of spending.
Key drivers of change
In the major developed markets, spending on branded medicines will remain essentially
unchanged in 2015 from the level in 2010, since all increases in spending on
brands will be offset by reduced spending on those brands losing patent protection.
Innovative products are expected to be launched which will bring important new
treatment options to patients with cancer, diabetes, thrombosis and debilitating
diseases of the central nervous system. Of particular note are the products
for diabetes that are expected to bring new options to patients. Additional
important new therapies with orphan drug designations or narrow indications
are also expected, but will not be a major driver of increased spending.
All of the increase in spending on brands - both new and existing - will be
offset by patent expiries which will reduce brand spending by $120 billion through
2015. Only spending on generics will increase in developed markets over the
next five years. In high growth emerging markets, spending will increase by
$150 billion, as improved access and strengthening economies drive higher demand,
primarily for generic drugs.
Policy-driven changes and impacts through 2015
Significant policy changes, made in 2010, will have longer-term impacts on the
spending and usage of medicines across many countries including the passage
of the Affordable Care Act in the US, a sweeping reform of Japan's unique every-other-year
price-cut system, and several new reforms to rebalance spending priorities in
each major European market. Important steps were also taken in the US and Europe
in the development of scientific guidelines for the approval of biosimilars.
Selected Product Launches 2009 - 2013
Key therapy areas
Spending on most therapies will grow at slower ratesor even declinethrough
2015. Specialty medicines will experience continued growth in the medium term
driven by novel mechanisms, improved efficacy and relatively large patient populations,
leading to increased uptake of these high-value medicines.
Global oncology spending will reach $ 75 billion by 2015, rising at a much slower
rate than in the past five years, as existing targeted therapies have already
been widely adopted in most developed markets, some major products will be exposed
to generic competition, and new products, with the potential to extend lives,
will add treatment options in several major tumours, but will not contribute
to significantly higher spending.
Global spending on diabetes will increase by four-seven per cent over the next
five years, accompanying increased prevalence of type II diabetes and treatment
rates especially in countries such as China, India, Mexico and Brazil. Greater
use of oral antidiabetic agents is expected due to their convenience and efficacy.
Annual spending growth through 2015 will slow to two-five per cent for asthma
and COPD medicines compared to nine per cent growth over the past five years;
spending on lipid regulators will fall to $31 billion in 2015 from $37billion
in 2010; and patent expiries will limit angiotensin inhibitors growth to one-four
per cent over the next five years compared to 12 per cent over the prior five
Some of the innovative research products launched/to be launched, which are
expected to drive markets (especially in the developed markets) in the next
few years are included in the table, 'Selected product launches 2009-2013' and
span disease areas like arrhythmia, autoimmune diseases, diabetes, hepatitis
C, lupus, melanoma, multiple sclerosis, osteopororsis, thrombosis and prostrate
However, some of the gains from the launch of these innovative products will
be offset by the patent expiry of existing brands, like Lipitor, Plavix, Nexium,
etc (See table: Major protection expiries by country by year)
Global biologic spending was $138 billion in 2010, compared to $311 million
for biosimilars. Much of the global biologics spending is concentrated in the
US. Biosimilar spending is concentrated in Germany and other European markets,
which adopted approval guidelines earlier and now account for over 80 per cent
of global biosimilars spending. (See table: 'Global biologics spending')
Global biologics spending
Global Biologics Spending
Europe's approval guidelines for monoclonal antibodies, expected
later this year, will add new molecules to this competitive space through 2015.
The US approval pathway, included in the Affordable Care Act, grants 12 years
of market exclusivity to originator biologics. New biosimilars are expected
to enter the US market by 2014, including epoeitin alfa and filgrastim, which
currently have proved biosimilars only outside the US.
Global country rankings
Rankings of the top five countries will remain unchanged
between 2010 and 2015
Among the top 20 countries, the big gainers in rank between 2010 and 2015, will
be Venezuela (+8), Argentina (+6), and India (+4).
Major protection expiries by country
India market scenario
The Indian pharma market is forecasted to grow at a CAGR
of 15.9 per cent (±4.0 per cent) between 2010 and 2015, doubling in five
years to Rs 119677 crore.
Market value calculated at ex-manufacturer price level
The hospital sector is expected to grow strongly and increase its share from
eight per cent in 2010 to 11 per cent in 2015, while the retail sector (though
growing in double digit figures) will post a corresponding decline.
India Pharmaceutical Market Forecast
Key growth drivers
Macro economic factors driving the market during the 2010-2015 period, are primarily
robust economic growth, greater marketing penetration into extra-urban and rural
areas, epidemiological changes, with a rapid increase in chronic, age-related
disorders; continuing rapid expansion of the private hospital sector, and increased
government spending on improvements in healthcare infrastructure.
On the other hand one factor that may impact the market trend
negatively, is increasing regulation of drug prices, with the possibility of
a greater number of drugs included in the Drug Price Control Order (DPCO).
Market forecast for the top 10 therapies, for the period 2010-2015 is as shown
in the table, '2010-2115: Top 10 therapy forecast. These 10 classes accounted
for 92.3 per cent of the market in 2010 and are expected to still account for
92.3 per cent in 2015. Changing epidemiological factors that are resulting in
a rapid increase in chronic age-related diseases is driving growth of cardiovasculars,
followed by CNS, genito-urinary drugs and alimentary tract and metabolism class
(including anti-diabetics). Oncology drugs, in spite of a relatively lower base
show the highest compounded annual growth rate of 17.5 per cent over the period
2010-2015. Musculo-skeletal drugs, followed by systemic anti-infectives and
respiratory drugs shows the maximum decline in market shares, even as they post
healthy double-digit growths, over the period 2010-2015.
The Global Use of Medicines: Outlook Through 2015,
IMS Institute for Healthcare Informatics (May 2011)
IMS Market Prognosis, April 2011 & September 2011