| On
21 March 2001 in New York, IMS HEALTH Global Services
held the fifth annual Drug and Chemical Allied Trades
(DCAT) Pharma/Chemical Horizons Seminar, co-sponsoring
the event with Chemical Engineering News. Clients
were presented with a detailed review of key market
developments in 2000, and a forecast of the global
pharmaceutical outlook through 2005.
Industry growth since 1995
For the global pharmaceutical industry in 2000,
IMS HEALTH estimates that total revenues exceeded
$320 billion, an 11% increase over 1999. The 10 strategic
markets (USA, Canada, Mexico, Brazil, France, Germany,
Italy, Spain, UK and Japan) accounted for the bulk
of the industry's activity, with total revenues topping
$270 billion in 2000.
The 'mega mergers' between Pfizer
and Warner-Lambert and Glaxo Wellcome/SmithKline Beecham
have shifted the top rankings among global competitors,
with IMS HEALTH estimating that the top 15 global
companies accounted for 58% of pharma sales in 2000,
compared with 53% in 1996.
Each 0.1% of the global market is equivalent to more
than $300 million in sales, and the pressure to develop
blockbuster drugs will continue to be paramount.
IMS HEALTH's VP of Strategic Consulting for Global
Services, Graham Lewis, estimates that it now costs
companies $1-1.5 billion in marketing for such
drugs, another variable underscoring the possibility
for further mergers.
IMS
HEALTH's VP of Strategic Consulting for Global Services,
Graham Lewis
Why the US market dominates
In recent years the majority of pharmaceutical blockbusters
have been first launched in the US market. Now familiar
names, such as Viagra
(sildenafil), Claritin (loratadine), Prozac (fluoxetine),
Lipitor (atorvastatin), and Prilosec/Losec (omeprazole)
rank as true blockbusters. Although this is in large
measure due to their potency and therapeutic benefits,
they also benefit from massive advertising campaigns
directed not only at healthcare professionals, but
increasingly at consumers.
According to IMS HEALTH, of the 15 fastest growing
products globally, nine originated in the US, with
only four coming from Europe, and the remaining two
from Japan.
What makes the US
market both formidable and essential? According
to Lewis's analysis, if your company is based outside
of the US and hopes to be competitive in the richest
and most consumer-savvy market, the minimum requirements
needed in order to compete are:
- expenditures
of $300 million to launch a new product
-
four-to-five thousand sales reps to detail the product
-
direct-to-consumer advertising of $150-300 million
Additionally, non-US companies need to be prepared
for a market that is far more price competitive
than those in Europe or Japan. Generic drug penetration
is now estimated at close to 40% of all prescriptions
written in the US. As Lewis noted, "If you win in
the USA, you win. If you don't win in the USA, you
lose."
Japan
and Europe struggle to stay in the race
IMS HEALTH projects that Japan and Europe will endure
a rockier period through 2005, due in large measure
to structural upheavals within their respective healthcare
and economic systems. During the period 1995-1999,
IMS HEALTH pegged average annual growth in these two
regions at 7% for Europe, and only 1% for Japan.
These markets, while significant, trail North America
by substantial margins in terms of total value, with
pharmaceutical revenues estimated at $52 billion for
Japan and $62 billion for Europe. On a more positive
note, growth in 2000 returned to a somewhat healthier
level in Japan, with a year-over-year increase of
4.5%.
The Japanese economy has been in the midst of a prolonged
slump since the 'bubble economy' of the early 1990s
collapsed. Political turmoil has also plagued the
country. Not surprisingly, major industries have endured
muted growth, including pharmaceuticals. Takeda (now
ranked 16th globally, according to IMS HEALTH) has
turned the corner with recent successes in North America,
such as its Type 2 diabetes agent, Actos,
but other Japanese pharmaceutical manufacturers have
not fared as well.
For Europe, the challenges are found more in the healthcare
arena, where governments are wrestling with how to
transform healthcare toward a more market-driven system.
The European "concept of equal access (to healthcare)
discourages individual choice" for paying higher premiums
for private health insurance, according to Lewis.
Many governments are on the verge of rationing care,
if not already doing so. While forecasting more price
convergence among European markets, IMS HEALTH expects
cross-border price differences will make it inevitable
that parallel trade will still occur, in spite
of heavy industry opposition.
IMS HEALTH's Director of Business Development
for Global Services, Carl Fearn
Emerging markets: a few surprises
In his presentation, Carl Fearn, Director of Business
Development for Global Services, noted that some of
the smaller, emerging markets offer excellent growth
prospects. Although each of these markets is modest
by global standards ($2-3 billion annually), IMS HEALTH
estimates that in percentage terms, these markets
were among the world growth leaders in 2000. Among
the most notable were:
- Poland,
up 19%
-
Australia, up 11%
-
Sweden, growth of 10%
-
India, growth of 9%
- Belgium,
a rise of 9%
The
internet: how will healthcare markets evolve?
Approximately four out of every 10 internet users
log-on looking specifically for healthcare information.
According to Fearn, even more strikingly, these consumers
tend to be highly educated, relatively affluent, and
nearly 60% of them are women.
In the US, where pharmaceutical DTC advertising is
expected to continue its aggressive drive in all media
- print, television, and the web - these educated
and wealthy internet users will also be among the
most active in seeking out medical therapies, according
to Fearn's analysis. As he noted, for those in the
50+
age group, many of the common illnesses require
constant, or even chronic, care:
- hypertension
-
Type 2 diabetes
-
hyperlipidaemia
-
osteoarthritis
-
depression
Among the hundreds of new chemical entities (NCEs)
in the global pipeline, dozens are focused on the
critical areas cited above, as well as areas such
as lifestyle
drugs, designed to help consumers lose weight,
arrest hair loss, and enhance sexual activity etc.
Fearn notes that among these therapy areas are several
NCEs that have blockbuster (peak sales of at least
$500 million annually) potential.
| Potential
Blockbuster Drugs Expected to be Launched Globally
2001-2003
| Company
|
Molecule/(Possible
Brand Name) |
Primary
Indication |
| AstraZeneca
|
rosuvastatin
(Crestor) |
Hyperlipidaemia
|
|
Viozan
|
Asthma
|
|
esomeprazole
(Nexium) |
GERD
|
| Bristol-Myers
Squibb |
Maxipost
|
Stroke
|
|
ompatrilat
(Vanlev) |
Hypertension
|
|
aripiprazole
(Abilitat) |
Psychosis
|
| GlaxoSmithKline
|
cilomilast
(Ariflo) |
Asthma
|
|
lamivudine/zidovudine/abacavir
(Trizivir) |
HIV
|
| Merck
& Co |
etoricoxib
|
Inflammation,
pain |
|
MK-826
(Invantz) |
Bacterial
infections |
| Pfizer
|
eletriptan
(Relpax) |
Migraine
|
| |
darifenacin
|
IBS;
urinary incontinence |
| |
voriconazole
(Vfend) |
Fungal
infections |
|
Source:
Pharma/Chemical Horizons 2001
How to Order These Presentations
To order your own copy of either "Future Winners and
Losers in the Pharmaceutical Industry" by Graham Lewis
or "Perspectives on the Global Pharmaceutical Industry"
by Carl Fearn, please contact Paul Jenner via e-mail
at pjenner@uk.imshealth.com,
or by telephone on +44 207-393-5828. The price for
each presentation is $1,000, or $1,500 for both.
Pharma/Chemical Horizons Seminars will take place
in Europe on the following dates. Contact Paul Jenner
as above for more information.
- May
15 - Baarn, The Netherlands
-
May 16 - Frankfurt, Germany
-
May 23 - Zurich, Switzerland
-
September 25 - Oslo, Norway
-
September 26 - Lugano, Switzerland
-
October 2 - Madrid, Spain
-
UK, French and Italian dates to be confirmed
|
