The U.S. pharmaceutical market is slow-growth for 2009, according to IMS Health. The company forecasts a tiny 1-2% growth rate for the next year. The data point comes from IMS’s annual Global Pharmaceutical and Therapy Forecast.
 
The U.S. market for pharmaceuticals will be worth about $300 bn in 2009.
 
What’s slowing growth prospects for the U.S. are the overall declining macroeconomy, and its impact on visits to physicians and, ultimately, drug sales. Other factors slowing down drug sales in the U.S. are loss of patent protection on former big-name drugs and the influence of payers in drug coverage benefit decisions and price tiering.
 
At the same time, there is strong growth expected in what IMS terms the “pharmerging” (pharma + emerging, got it?) markets including the so-called BRIC countries (Brazil, Russia, India and China) along with South Korea, Mexico, and Turkey. Together, these emerging nations will grow at over 14% over the year to over $100 bn worth of pharma market.
 
Europe’s drug sales will grow about 3-4%, but will be slowed by comparative effectiveness research (such as NICE evaluations in the U.K. and Institute for Quality and Efficiency in Germany) and contract pricing in many countries.
 
Health Populi’s Hot Points: This is not good news — and I’m not talking strictly from an internal pharmaceutical company perspective. I’d like to address the bad news from an external, strategic perspective, and a public health one.
 
The fact remains that in 2008, only a handful of new-new products were approved by the FDA. For 2009, only about 25-30 new chemical entities are expected to launch. A few could be blockbusters for cardiovascular, diabetes, and rheumatoid arthritis, but that remains to be seen.
 
Thus, productivity in pharma commercialization is low and not improving for yet another year.
 
Furthermore, the go-go projections for the BRIC countries could be adversely affected by the global macroeconomic downturn. In these countries, citizens are often called upon to pay big out-of-pocket co-payments. What’s impacted American consumers in terms of Rx brand sticker-shock could impact citizens in other countries. And generics are also used in big volumes in these countries to save, whether in currencies of reals in Brazil, roubles in Russia, rupees in India, or renminbi in China.
 
The bottom line for public health is that we’re not seeing new-new innovations coming out of pharma. If they are, they’re not getting approved by the hamstrung FDA — which appears to be in the midst of a hiring spree. Perhaps the agency can bring on board a few hundred creative, inspiring scientists who can make some miracles along with an industry segment that needs to fill unmet market needs…and soon.
 

What would also slow the pipeline down to a near-halt is the fact that, according to the Wall Street Journal, “cash-poor biotech firms” are cutting research budgets and looking for financial help. According to BIO, biotech’s lobby group in DC, about 100 publicly traded biotech companies are operating with less than 6 months’ cash, and 38% have less than one year’s cash on hand.
 
Small life science companies have become a main pipe for Big Pharma pipeline development. If that little pipe dries up, the Big Pharma pipeline gets drier than it already is.
 
 
As if the pharma industry needs any more negatively impacting market drivers, add the credit crunch to the ever-growing list. In a well-reasoned piece, “Credit Crunch Threatens New Medicines,” ScienceDaily quotes Dr. David Wield of the Edinburgh-based Economic and Social Research Council‘s (ESRC) Innogen Centre: “Big companies have been laying-off staff and closing down research units, instead looking to biotechnology start-ups for new ideas.”

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