Drug sales growth will slow this year, but the industry is still set to top $1 trillion by 2014. Burgeoning markets in the developing world will help make up the losses to generic competition elsewhere, IMS Health says. And that's not what everyone was expecting a few years ago when the patent cliff loomed large in every pharma executive's mind.
"What's a little surprising is how robust we expect the growth to be notwithstanding we're going to be passing through the peak years of loss of exclusivity," Murray Aitken, SVP at IMS Healthcare Insight, tells Reuters. "That really is a reflection of how much the global market has moved away from dependence on five or six major developed markets."
Here are the numbers: IMS is expecting a 5 percent to 8 percent compound annual growth rate over the next five years, amounting to a $300 billion increase in the size of the global drugs market. Major emerging markets such as India and China are expected to fuel a big chunk of that rise, with up to 17 percent growth per year. China is expected to become the world's third-largest drugs market next year, surpassed only by the U.S. and Japan.
So, the main question for Big Pharma is whether individual companies can take advantage of the emerging-markets growth to offset generic competition and pricing pressures in mature markets such as the U.S. and Europe. Which companies will do the best job of riding the emerging-markets wave?