From the projection it made in October 2008 of future market growth, IMS Health (Norwalk, CT) has shaved two percentage points for 2009 and the next few years. In its latest projection, released in April, the global market will grow by 2.5-3.5%. IMS Health has calculated the 2008 market as $773 billion (see chart), but now it’s forecasting a market only “exceeding $750 billion.” (Currency fluctuations are among the reasons that the discrepancy could occur.)
“There is a clear correlation between demand for medicines and key macroeconomic variables such as GDP, consumer spending and government expenditures,” says Murray Aitken, SVP, Healthcare Insights, at IMS. “We see the worldwide financial crisis contributing to record-low sales growth this year. The pharmaceutical industry is not recession-proof, but it is insulated to a greater extent than other industries where spending is more discretionary.”
The US market will actually decline by 1-2% this year, “a historic low,” says IMS Health; moreover, the five-year CAGR will be essentially flat. Besides the current economic troubles, the much-anticipated expiration of key blockbuster patents in 2011-2013 will keep national sales from advancing.
In Europe and Japan, growth rates will be in the 1-4% range. On the other hand, what IMS Health likes to call the “pharmerging markets” in China, Asia (except Japan) and Latin America will grow by 13-16% clips; China will move from the world’s sixth-largest market to the third-largest over the next three years.
On the product-introduction front, IMS Health expects 50 to 60 new chemical or biological products to be launched in the next two years, and that six to 10 of them will have blockbuster potential. But about two-thirds of the launches will be “specialist driven” and for niche indications and narrow patient populations.
The projections are based on IMS Health’s Market Prognosis forecast, combining GDP and consumer spending generated by the Economist Intelligence Unit, along with both audited and nonaudited pharma sales data that IMS Health collects. PC