Pharmaceutical Commerce - May/June 2011 - (Page 8)
IMS Institute Calculates a $307.4B US Market In 2010; Forecasts a $1.1T Global Market by 2015
Generics claim 78% of US market; prescriptions dispensed were up slightly, but doctor visits declined in 2010
As compared to 5.1% growth in 2008-9, the US market grew by only 2.3% in 2010, according to the annual compilation now published by the IMS Institute for Healthcare Informatics (Parsippany, NJ). A growth rate of around 5% or less has been the pattern for bio/pharma since 2007, handicapped by the relative lack of new blockbusters, price pressure from payers and, most recently, the economic decline that starting correcting in early 2010. “Fewer patients visited physician offices and initiated new chronic therapy treatments last year, likely the result of the slower economy,” says Michael Kleinrock, research director at the IMS Institute. “It became apparent in 2010 that the healthcare landscape is shifting in significant ways. Physicians and patients have more therapy options than ever, and yet spending on medicines is rising at historic lows.” The IMS Institute found that prescription volume was up very slightly (1.1%, to 3.995 billion), but the volume of doctor visits has been declining slowly, falling by 4.2% since mid-2009. Other notable drug-spending statistics: Medicare Part D now represents 21.8% of overall drug reimbursement, while commercial third-party insurance declined to 62.9%. The percentage of all prescriptions filled by generics rose to 78%. On the global front, a second IMS Institute report, “Global Use of Medicines” forecasts a 3-6% CAGR over the next five years, which could be as much as three percentage points below the CAGR of the past five years. Overall sales will reach $1.1T in 2015. (Last year’s IMS Health global forecast saw this happening in 2014, so the forecast has become more conservative over the past year.) Fig. 1 is a waterfall diagram showing the projected spending trends. “Pharmerging” markets (China, Brazil, India, Russia, plus 13 other countries that each will generate $1B in sales growth) will add $150B to the global figure. Some $120B in patent expiries will occur over the five-year period, replaced by $22B in generic spending for the same drugs, and resulting in what IMS Institute calls a “patent dividend” of $98B in savings to come from the money that had been spent commercializing these drugs in years past. New brands yet to be introduced will generate an estimated $120B in revenue for the industry. Biosimilars, currently a $311M business, mostly in Europe, are projected to grow to $2-2.5B by 2015.
“It became apparent in 2010 that the healthcare landscape is shifting in significant ways. Physicians and patients have more therapy options than ever, and yet spending on medicines is rising at historic lows.”
US channel trends The overall trends vary only slightly from the year before, but show a continuation of prescriptions being filled at chain drugstores over independents, and flattening of spending and prescription-filling at mail order providers. The overall market was worth $307.4B in 2010. Of that $108.1B, or 35.2%, was spent at chain drugstores, up a hair from 35.1% in 2009 (Fig. 2). Spending at independent drugstores was $37.9B, 12.3% of the total, but down from 2009’s 12.4%. Mail service garnered $52.6B of spending, or 17.1%, the same percentage it saw in 2009. There had been a slow growth trend in mail service going back several years, but that appears to be cresting. (Pharmaceutical Commerce Editorial Board member Adam Fein points out that retail revenue figures do not include retailers’ markups of drug costs, so they are more properly characterized as retailer purchase costs rather than spending.) Spending at clinics and non-federal hospitals, the other two large channel catego-
ries, increased slightly, with clinics ($36.2B in 2010) representing 11.8% of drug spend, up from 11.6% the year before, while hospitals ($28.0B) came in at 9.1%, down from 9.2% the year before. Dispensing trends There were 3.995 billion prescriptions filled in 2010, according to the IMS Institute, up 1.2% from 2009 (Fig. 3). Chains increased their share of this statistic as well, representing 54.4% of dispensing locations, while independents dropped from 19.1% in 2009 to 18.7%. Meanwhile, mail service was unchanged, at 6.6% for both 2009 and 2010. Even so, those statistics show that while chains fill more than half of prescriptions to garner a third of the spending, mail service fills one out of 15 prescriptions but garners one out of six drug-spend dollars. At independents, the proportional ratio between prescriptions filled and revenue generated is almost one-for-one. The full reports are available at the IMS Institute website, theimsinstitute.org.
8 May | June 2011
Table of Contents for the Digital Edition of Pharmaceutical Commerce - May/June 2011
Pharmaceutical Commerce - May/June 2011
Table of Contents
Business / Finance
Supply Chain / Logistics
Meetings and Editorial Index
Pharmaceutical Commerce - May/June 2011