US pharma market will top $377 billion in 2014; up 11-13%

The go-go days of the early 2000s, when the US pharma industry routinely had double-digit growth, haven’t exactly returned in full force. But from the 1-3% annual increases in the past several years—including a first-in-recent-history actual decline in 2012—the US market is projected to grow 11-13% when the books close on 2014. The “official” count, from IMS Health, won’t be ready until early spring 2015, but in its annual “Global Use of Medicines” report, just issued, IMS’ Institute for Healthcare Informatics projects that the US market will be in the range of $377-384 billion for 2014, up 11-13%. It and Japan will experience a “spike” in 2014-5; after that growth will moderate. The compound annual growth rate for the global market will be 4-7% during 2013-2018; for the US, it is projected to be 5-8%.

What IMS Health has labeled “pharmerging” countries—21 countries whose 2013-2018 growth will be greater than $1 billion in absolute terms—will average 8-11% CAGR, reaching $358-388 billion by 2018, led by China’s 10-13% growth, to $155-185 billion. China has already become the world’s second-largest pharma market, passing Japan.

The EU5 (Germany, France, Italy, UK, Spain) will experience 1-4% growth over the next five years, reaching $157-185 billion by 2018. France and Spain might actually have a negative CAGR over the period.

Several factors affect global trends: the “patent cliff” of expiring blockbusters has bottomed out; while a peak of 48 drugs lost exclusivity in 2012, only 20 did in 2013, and a projected 25 in 2014. IMS estimates that $48 billion in biologics spending will lose exclusivity during 2014-2018, but “gradual evolution of biosimilar regulations and competition will result in less impact on brands than is typically seen with small molecules.” according to lead author Murray Aitken, SVP and executive director of the Institute.

Specialty medicines will be “a strong driver in developed regions,” IMS projects, with 53% of spending growth attributable to that category in the US for 2013-2018. They will be the driver for 94% of spending growth in Europe, and 40% globally.

On interesting factoid from the report: Although the US FDA routinely gets excoriated for delaying the introduction of new drugs, over the 2008-2012 period, 104 new medicines were introduced in this market—the second-highest was Germany, with 82, and the rest of the world behind that. (A total of 154 new molecular entities [NMEs] were available in 2013 from the period.) IMS also projects about 200 NMEs will be introduced during 2013-2018.

The full report is available at theimsinstitute.org.