IMS Health, a US pharmaceutical and healthcare industries research firm, on Tuesday announced that 2005 total global pharmaceutical sales* (see endnote) grew 7 percent at constant exchange rates, to $602 billion. In the ten major markets, audited growth was 5.7 percent in 2005, compared with 7.2 percent the previous year. 

Figure 1 : Effect of LIPITOR 10 mg/day on Cumulative Incidence of Nonfatal Myocardial Infarction or Coronary Heart Disease Death in Anglo-Scandinavian Cardiac Outcomes Trial

Pfizer, the world's biggest pharmaceutical firm has 14 of the world's 25 best-selling medicines. In addition, its cholesterol-lowering Lipitor is the world's top-selling prescription drug, contributing 20 percent of the firm's sales.

This group accounts for 81 percent of the total global pharmaceutical market, but emerging markets including China, Korea, Mexico, Russia and Turkey, all experienced double-digit growth, outpacing global performance and signaling important shifts in the marketplace.

“As growth in mature markets moderates, industry attention is shifting to smaller, developing markets that are performing exceptionally well,” said Murray Aitken, IMS senior vice president, Corporate Strategy. “Many of these countries are experiencing significant GDP growth—which helps finance improvements in their healthcare systems, increases patient access, and fuels the double-digit growth we are seeing. Pharmaceutical manufacturers are working to address the unmet healthcare needs in these markets as a means to improve overall business performance.”

Product Innovation, Access Drive Growth

In 2005, pharmaceutical growth worldwide was driven by increased longevity of populations, rising wealth, innovative new products, and new applications for existing products.  Last year, 40 percent of total market growth was fueled by the introduction of new products, including 30 new molecular entities launched in key markets.

Notable product launches in 2005 included Byetta®, the first in a new class of medicines for improved blood sugar control in patients with Type 2 diabetes; Lunesta® which treats insomnia, decreases sleep latency and improves sleep maintenance; and Macugen® which treats neovascular age-related macular degeneration. 

“We have seen some exceptional advances in the treatment of critical disease conditions, with many promising therapies now in Phase III clinical trials, encompassing both vaccines to prevent disease and more effective life-saving therapies,” said Aitken. “For example, Gardasil® and Cervarix® promise to be effective vaccines against HPV, the cause of nearly three-quarters of the cases of cervical cancer, which last year contributed to the death of more than a quarter of a million people worldwide. These and other therapies for the treatment of cancer, cardiovascular disease, and diabetes will improve life expectancy and enhance patient quality of life.”

In 2005, more than 2,300 products were in clinical development, up 9 percent from 2004 levels, and up 31 percent over the past three years. A promising range of drugs are now in Phase III clinical trials or pre-approval stage, including 96 oncology products, 51 products for treating cardiovascular disease, 37 for viral infections and HIV, and 28 for arthritis/pain. Of the total pipeline, 27 percent of these products are biologic in nature—an all-time high.  Biologics also experienced strong growth overall, adding $7.6 billion in sales to the global pharmaceutical market in 2005. Led by Amgen, Roche/Genentech and Johnson and Johnson, this sector grew 17.1 percent in 2005, generating sales of $52.7 billion.

Regional Performance

In 2005, North America, which accounts for 47 percent of global pharmaceutical sales, grew 5.2 percent, to $265.7 billion, while Europe experienced somewhat higher growth of 7.1 percent, to $169.5 billion. Sales in Latin America grew an exceptional 18.5 percent to $24 billion, while Asia Pacific (outside of Japan) and Africa grew 11 percent to $46.4 billion. Japan, the world’s second largest market, which has historically posted slower growth rates, performed strongly in 2005, growing 6.8 percent to $60.3 billion, its highest year-over-year growth since 1991. That performance was fueled by growth in angiotensin IIs, antihistamines and oncology therapies, as well as significant uptake in geriatric-related therapies such as Aricept®, for treating Alzheimer's, and Cabaser®, Permax® and Bi Sifrol®, for treating Parkinson’s Disease.

“While growth in Japan rebounded, the bright spot in Asia Pacific continues to be China,” said Ray Hill, general manager, IMS Global Consulting.  “The combination of a healthy economy and increasing diagnosis and treatment rates make China extremely attractive to multinational pharmaceutical companies.  Many of them are expanding their presence in China now because they recognize the significant long-term business opportunities that market presents.”

Pharmaceutical sales in China grew 20.4 percent to $11.7 billion in 2005, representing the third consecutive year that market has achieved 20+ percent growth. IMS estimates that China will be the world’s seventh largest pharmaceutical market by 2009.

Positive Outlook for Blockbusters

The number of blockbuster products (those with sales exceeding the billion-dollar level) reached 94 in 2005 compared with 36 in 2000 and included 17 new members of the billion-dollar club. While six blockbusters are expected to lose their patents in 2006, the launch of new products and continued growth of those already on the market will result in an increasing number of blockbusters over the next five years.

Among the newcomers were two cholesterol lowering drugs, Crestor from AstraZeneca PLC and Vytorin, which is made by a joint venture between Merck and Schering-Plough Corp.

“The end of blockbusters is not upon us, despite what some analysts are saying,” observed Aitken. “In fact, we expect that blockbusters will continue to be an important part of pharmaceutical market growth over the next five years, due to new uses for existing therapies, the emergence of niche/specialty products, and the ongoing demand for chronic disease treatments.” 

Looking Ahead

For many pharmaceutical manufacturers, 2005 was a year of transition as they responded to cost containment challenges, regulatory setbacks and safety issues.  However, a combination of surging underlying demand driven by aging populations, and successful innovation in areas of high unmet need, will continue to fuel growth. Generics will assume a more central role as patients bear a greater percentage of their healthcare costs and payers seek to restrict the growth of healthcare expenditures. Price moderation for branded drugs is likely as a result. In 2005 sales of generics in the top eight markets (U.S., Canada, France, Germany, Italy, Spain, U.K. and Japan) exceeded $55 billion, and are expected to experience double-digit growth over the next five years.

IMS forecasts that the total pharmaceutical market will expand at a compound annual growth rate of 5-8 percent over the next five years. North America and Europe are each projected to grow at a 5-8 percent pace; Asia Pacific/Africa, 9-12 percent; Latin America, 7-10 percent; and Japan, 3-6 percent.

 “Moderating growth in the top ten markets, along with the focus on generics as a cost-effective alternative to branded drugs, will present challenges to the pharmaceutical industry worldwide, but we don’t expect these to stand in the way of pharmaceutical growth,” said Aitken. “What is critical to long-term success in the marketplace, however, is the need for payers and manufacturers to jointly strike a balance between prevention, treatment and cost containment. This is an urgent imperative with new delivery systems on the horizon to improve patient quality of life and vaccines to prevent disease.”

Additional Information

*Total global pharmaceutical sales include audited and estimated unaudited information. These pharmaceutical sales are derived from IMS audits, which cover 95 percent of the market, while the remaining 5 percent are estimates derived from IMS World ReviewTM.  Growth in sales is measured in constant dollars, enabling analyses without the influence of fluctuating currency exchange rates. Pharmaceutical sales figures are measured in current US dollars, include prescription and certain over-the-counter data, and reflect ex-manufacturer prices.