IMS: Reform to lift drug sales 3.5% annually

Yet more debate on whether healthcare reform in the U.S. will help drugmakers, and if so, how much. The industry says not so much. But industry-watching number crunchers tell a different story.

PhRMA Chairman (and AstraZeneca chief) David Brennan (photo) tells Reuters that "there is not an obvious upside" to make up for the $80 billion in cost cuts drugmakers pledged to the Senate and White House to jump-start reform. But Brennan is quick to acknowledge that if the folks newly insured under reform get the right sort of access to care, then drugmakers could benefit, he tells the news service.

Meanwhile, Merck CEO Dick Clark (photo) is a bit more optimistic; he told the Reuters Health Summit that he still hoped Congress would pass a bill that would boost prescription drug use, at least eventually. But even then, pharma won't be rolling in lots more dough: "You may see a slight increase ... in volume," but rebates or downward pricing pressure could erase the benefit of growing scrip numbers, he said.

But the market research folks at IMS Health seem to disagree. According to The New Republic, IMS has released a new estimate of drug industry growth from 2008 to 2013. And it's higher--lots higher--than the estimates that came out earlier this year. Back then, IMS predicted no U.S. pharma sales growth over that five-year period. Now, the firm projects annual growth of 3.5 percent.

Why? In its new report, IMS credited healthcare reform. The research firm figures that reform will end up spawning more demand for branded meds, and that drugmakers would be able to raise their prices enough to goose revenues upward, TNR reports. "If this bill is implemented," the report states (as quoted by TNR), "an increase in prices on new drugs can be expected." So who's right? Give us your take.

- read the Reuters story
- check out the article from TNR