According to IMS Health, audited and estimated unaudited* global pharmaceutical sales grew 7% at a constant US dollar in 2004, to reach a record $550 billion. This compared to 9% growth in 2003, when the world-wide drug market reached $491.8 billion. Audited sales* in 2004 also passed the $500 billion threshold, to reach $518 billion, up from $466.3 billion in 2003.
“The global growth rate moderated as the market is increasingly influenced by pressures and uncertainties, including pricing, safety and regulatory issues. Nevertheless, market growth continues to reflect the unmet need for medications, as well as ongoing demographic dynamics that are strengthening underlying demand. New opportunities are emerging in markets such as China, and from sources of innovation in biotechnology, which will continue to fuel future growth," Murray Aitken, IMS Senior Vice President, Corporate Strategy, commented.
Chinese market reports highest growth
Geographically, the most notable element of the pharmaceutical market in 2004 was the impressive growth recorded in China, which saw sales increase 28% year-over-year to reach $9.5 billion. China's overall contribution was relatively small, compared with $248 billion (nearly 45% of the global total) for North America, but with a huge population and flourishing economy, we predict it will be a major driver of the global market in the coming years.
By comparison, many established markets are seeing their growth slow as government needs to contain costs increase the use of more unbranded medicines: in 2004, generics accounted for more than 30% of volume consumption in the US, Germany, Canada and the UK, and 17% in the top 12 European markets. Nevertheless, generics still only accounted for 8% of drug sales by value in North America and Western Europe.
2004 Global pharma sales by region*
|
World Audited Market |
004 Sales ($bn) |
% Global sales (%) |
% Growth (constant $) |
|
North America |
248 |
47.8% |
+7.8% |
|
European Union |
144 |
27.8 |
5.7 |
|
Rest of Europe |
9 |
1.8 |
12.4 |
|
Japan |
58 |
11.1 |
1.5 |
|
Asia, Africa and Australia |
40 |
7.7 |
13.0 |
|
Latin America |
19 |
3.8 |
13.4 |
|
TOTAL IMS Audited |
$518bn |
100% |
+9%
|
IMS expects cost containment to increasingly impact the US market, where volume increases will be the major driver of growth. The world-wide pharmaceutical market is expected to grow by 6-9% between 2005 and 2009. China, ranked as the ninth largest individual market in 2004, is predicted by be ranked eighth by 2008, and possibly higher, with 13-16% compound annual growth expected through 2008 – outstripping the other major markets.
Cancer to challenge cardiovascular and CNS?
Treatments for hypercholesterolaemia (ATC class C10A) remained the top selling therapy class in 2004, with sales of $30 billion, followed by anti-ulcerants (A2B). Overall, cardiovascular and central nervous system treatments continued to dominate, with antidepressants (N6A) maintaining a high ranking in the face of lower growth (owing to generic competition). Antipsychotics (N5A) and anti-epileptics (N3A) both registered healthy increases in sales over the year. Thanks to their expansion into the treatment of heart failure and the continuing release of promising clinical trial data, the newest class of antihypertensives, the angiotensin II antagonists (for example Diovan, Atacand), saw their sales increase 22% in 2004 (C9C and C9D (plain/plus diuretic) therapy classes combined).
Looking to the future, however, IMS expects cancer drugs to challenge these long-standing leaders. Combined, the L1 (antineoplastics) and L2 (cytostatic hormone antagonists) groups registered 17% growth in 2004. An increasing number of newer, targeted cancer therapies are seeing impressive sales, such as Eloxatin, Glivec, Rituxan, and now Avastin – approved for colorectal cancer but also reporting a survival benefit in non-small cell lung cancer in March 2005.
Oncology projects accounted for almost 30% of the total industry R&D pipeline as of February 2005, and we believe the cancer market will be worth more than $40 billion by 2008, driven by an ageing population, better diagnostics, and the introduction of further innovative products that have many years of patent protection ahead of them. Moreover, cancer drugs cannot be impacted by over-the-counter switching, which has affected the performance of classes such as non-sedating antihistamines and proton pump inhibitors, and, following the first introduction of Zocor Heart Pro in the UK in July 2004, could catch on for the statins.
Blockbusters increase
Despite the challenging environment in many leading markets, the blockbuster drugs continued to dominate. In 2004, IMS recorded 82 pharmaceuticals with annual sales in excess of $1 billion, up from 65 in 2003. The number of blockbusters surpassing $2 billion in annual sales increased from 25 to 34 (up from seven in 1999). Interestingly, 35 of the global blockbusters have not yet been launched in Japan, the world's second largest market.
An increasing number are being generated by the biotechnology sector and target specialist markets such as oncology: in 2004, 11 blockbusters were biotech products and seven were indicated for cancer. According to IMS, biotechnology drugs now account for 27% of the active R&D pipeline and garnered 10% of global pharmaceutical sales in 2004. We predict that biotech products will see double-digit growth over the next five years, continuing to increase their share of the overall market, despite the fact that the first 'biogenerics' may be nearing launch.
Leading products in 2004 by global pharmaceutical sales*
|
Rank |
Audited World Product Sales |
2004 sales ($bn) |
% Growth (constant $) |
|
1 |
Lipitor |
12.0 |
+13.8% |
|
2 |
Zocor |
5.9 |
-6.4 |
|
3 |
Plavix |
5.0 |
31.4 |
|
4 |
Nexium |
4.8 |
25.3 |
|
5 |
Zyprexa |
4.8 |
-3.5 |
|
6 |
Norvasc |
4.8 |
1.2 |
|
7 |
Seretide/Advair |
4.7 |
22.5 |
|
8 |
Erypo (Eprex/Procrit) |
4.0 |
-4.1 |
|
9 |
Ogastro/Prevacid |
3.8 |
-3.5 |
|
10 |
Effexor |
3.7 |
20.1 |
|
Total 10 Leading Products |
$53.6bn |
+8.6% |
Though the top 10 individual pharmaceutical products had mixed fortunes, and reported lower growth combined over 2003, they increased their global market share slightly in 2004 and achieved $53.6 billion in sales. Pfizer's Lipitor again sold twice as much as its nearest rival, continuing its solid growth of 14% from 2003 to reach annual revenues of $12 billion in 2004. Given upcoming patent expiries and safety concerns for rival statins, Lipitor's position appears unassailable, at least in the short term... although, the fastest growing product in 2004 was Zetia, the cholesterol absorption inhibitor from Schering-Plough and Merck & Co. The most impressive performance within the top 10 came from sanofi-aventis and Bristol-Myers Squibb's Plavix: the platelet anti-aggregant rose from eighth to third position over 2004, driven by promising trial results. The only new entry was Wyeth's SNRI antidepressant Effexor, which replaced rival Zoloft from Pfizer in tenth place.
The contribution of the combined top 10 pharmaceutical corporations to global sales growth declined slightly in 2004, with smaller specialty and biotech firms gaining ground. The top 10 corporations combined accounted for 48% of global sales in 2004, however. Pfizer and GlaxoSmithKline retained their first and second places, but there was a new arrival in the shape of sanofi-aventis, formed when Sanofi-Synthelabo (ranked 14 in 2003) merged with Aventis (seventh). Both sanofi-aventis and Roche had above average growth across all the major geographical markets during 2004.
With the withdrawal of Vioxx in September 2004, further controversy over the safety of SSRI antidepressants, and the suspension of sales of new multiple sclerosis therapy Tysabri in February 2005, drug safety has become a paramount concern for both regulators and patients. There are already signs that the FDA is setting the bar higher for approval, and development times may lengthen as companies have to run longer and larger trials to gather the necessary data. Combined with price cuts or restraints and the encouragement of generic prescribing, growth will be tempered in many major markets. But these factors will be offset by the increased demand from an ageing population, boosted by the arrival of the Medicare prescription drug benefit in the US in 2006, plus increasing demand for hospital, biotech and fixed combination products. And in the meantime, there are clear pockets of growth, such as China, and it can be no coincidence that behemoths such as GSK and Merck & Co have recently increased their focus on cancer.
For a definitive overview of the rankings and trends seen in 2004, IMS World Review 2005 is now available. For further information, please call +44 207 393 5757.
*Note: Global pharmaceutical sales are derived from IMS audits, which cover 95% of the market, while the remaining 5% are estimates derived from IMS World Review. Total IMS audited sales for 2004 exclude unaudited market and IMS MIDAS panels that were missing at the time of the analysis: Estonia, Lithuania, Belarus, Bulgaria, Dominican Republic, Russia, and Ukraine. Growth in sales is measured in constant dollars, enabling analyses without the influence of fluctuating currency exchange rates. Sales cover direct and indirect pharmaceutical channel purchases in US dollars from pharmaceutical wholesalers and manufacturers. The figures include prescription and certain OTC data and represent ex-manufacturer prices. Totals may not add due to rounding.