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The Trillion Dollar Market for Medicines: Characteristics, Dynamics and Outlook
Johns Hopkins Bloomberg School of Public Health Center for Drug Safety and Effectiveness Safety, Value and Innovation Seminar
Murray Aitken Executive Director www.theimsinstitute.org [email protected]
February 24, 2014
Contents
• About the IMS Institute
• Methodology and measures
• Global spending on medicines
• Mix of branded and generic medicines
• Transformations in disease treatment
• Implications and discussion
Safety Value and Innovation Seminar JHU 022414 2
About the IMS Institute
Unbiased Information
Academic Research
Public Policy Support
3 Safety Value and Innovation Seminar JHU 022414
During 2013 we published six major reports
Teva Public Health Discussion 013014 4
Methodology
• Forecasts of spending on medicines globally are based on proprietary analysis performed by IMS Health and published as IMS Market Prognosis reports for 42 countries, 11 regions, and globally
• Methodology for each country forecast combines: − Collection of historical data by sector as captured by IMS audits, estimates of
unaudited market sectors, and 5 most significant macroeconomic indicators based on historical correlation
− Quantitative projection of baseline based on historical trends and macroeconomic indicator forecasts provided by the Economist Intelligence Unit
− Identification, evaluation and quantification of specific events that are used to refine the baseline based on IMS expertise and insight within each country
• Evented 5-year forecasts are produced for retail and hospital, price and volume, as well as total market
• Additional proprietary analysis of the IMS Market Prognosis reports is performed by the IMS Institute to generate additional analytics and insights, some of which are incorporated in the IMS Institute report
Safety Value and Innovation Seminar JHU 022414 5
Notes on measures
• Market sizes are measured in U.S. $, converted at Q2 2013 average exchange rates
• All growth rates are measured in constant dollars (local currency growth)
• “Spending” refers to the amounts paid to pharmaceutical companies for medicines, not the cost incurred by the end-user or payer
Safety Value and Innovation Seminar JHU 022414 6
Total global spending on medicines will reach about $1.2Tn in 2017, an increase of $205-235Bn from 2012
Global spending and growth, 2008-2017
2007 2008-2012 2012 2013-2017 2017
$731Bn
$234Bn
$965Bn
$205-235Bn
$1,170-1,200 Bn
Source: IMS Health Market Prognosis, September 2012
7 Safety Value and Innovation Seminar JHU 022414
Annual spending growth will reach a low point in 2013, followed by increased growth particularly in developed markets
Safety Value and Innovation Seminar JHU 022414 8
Global Growth, 2008-2017
-10
0
10
20
30
40
50
60
70
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
ABSO
LUTE G
RO
WTH
CO
NST $
USBN
Developed Pharmerging Rest of World
2008-12 Growth $217Bn
2013-17 Growth $230 -260Bn
Source: IMS Health Market Prognosis, September 2013
Medicine spending per capita and growth rates are starkly different between high income countries and those with income under $25,000 per capita
Safety Value and Innovation Seminar JHU 022414 9
Per capita Gross National Income 2012 (GNI) vs. Forecast Pharma Spend
India
China
Mexico
Turkey
Russia
Brazil
S. Korea
Spain
UK Italy
Japan
France
Canada
USA Germany
-5%
0%
5%
10%
15%
20%
0 10 20 30 40 50 60
PHARM
A F
ORECAST G
RO
WTH
(CAG
R 2
013-1
7)
GNI (US$ THOUSANDS PER CAPITA)
Pharma Spend per Capita
Source: World Bank, 2012; IMS Health Market Prognosis, September 2013
$100
$500
$1,000
Interferons
ADHD
Antivirals excluding HIV
Antidepressants
Antiulcerants
Antipsychotics
Immunosuppressents
Anti-Epileptics
Cholesterol
Antibiotics
Dermatology
HIV Antivirals
Immunostimulants
Hypertension
Other CNS Drugs
Asthma/COPD
Pain
Anti-TNFs
Diabetes
Oncology
Immunostimulants
Erectile Dysfunction
Heparins
Antipsychotics
Antiplatelet
Antidepressants
Allergy
Immunosuppressents
Antivirals excluding HIV
Anti-Epileptics
Asthma/COPD
Cholesterol
Antiulcerants
Dermatology
Diabetes
Hypertension
Oncology
Antibiotics
Other CNS Drugs
Pain
Spending levels in 2017 on medicine for specific disease areas will differ significantly between developed and pharmerging markets
Safety Value and Innovation Seminar JHU 022414 10
Spending by Therapy area in 2017
Top 20 Classes, 71% Others, 29% Top 20 Classes, 45% Others, 55%
Developed Markets Pharmerging Markets* Sales in 2017 (LC$)
$74-84Bn
$34-39Bn
$32-37Bn
$31-36Bn
$31-36Bn
$26-31Bn
$23-26Bn
$22-25Bn
$22-25Bn
$22-25Bn
$18-21Bn
$16-19Bn
$15-18Bn
$15-18Bn
$13-16Bn
$12-14Bn
$10-12Bn
$8-10Bn
$7-9Bn
$6-8Bn
$22-25Bn
$20-23Bn
$18-21Bn
$17-20Bn
$14-17Bn
$10-12Bn
$10-12Bn
$9-11Bn
$6-8Bn
$3-5Bn
$3-5Bn
$3-5Bn
$3-5Bn
$3-5Bn
$3-5Bn
$3-5Bn
$2-3Bn
$1-2Bn
$1-2Bn
$1-2Bn
Sales in 2017 (LC$)
Source: IMS Health Thought Leadership, September 2013
A growing share of all medicines are biologic, with biosimilars and non-original biologic (NOB) products now taking a small share of the total market
Safety Value and Innovation Seminar JHU 022414 11
The biologics market
2002 2007 2012 2017
Biologics share of total pharmaceutical market:
15% 18% 19-20% 11%
NOBs
Biosimilars
Global biologics size
1.0%
0.4% 0.5% 0.3%
$46Bn $106Bn $169Bn
1.0%
0.4% 0.3%
2-5%
Share of biologics:
$205-235Bn
Source: IMS Health Thought Leadership, September 2013
0.5%
The U.S., EU5, Japan and China account for just under 70% of total global medicine spending
Safety Value and Innovation Seminar JHU 022414 12
Geographic distribution of medicine spending
31%
13%
9%
15%
33%
$1,170 – 1,200BN
34%
15% 12%
8%
31%
Spending
2012 2017
US EU5 Japan China ROW
$965BN
16% 3%
6%
34%
41%
$230-260BN
Growth
2013-17
Source: IMS Health Market Prognosis, September 2013
Base case forecast for the U.S. is for 1-4% CAGR
Safety Value and Innovation Seminar JHU 022414 13
U.S. Spending and Growth, 2008-2017
-4%
-2%
0%
2%
4%
6%
8%
10%
0
50
100
150
200
250
300
350
400
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GRO
WTH
CO
NST U
S$ S
PEN
DIN
G U
S$BN
Sales Growth
2013-17 CAGR, 1-4% Forecast
Source: IMS Health Market Prognosis, September 2013
Alternative scenarios for the U.S. focus on the implementation of healthcare reform
Safety Value and Innovation Seminar JHU 022414 14
Scenario Healthcare Reform Implementation
Implications for Medicine Spending
Scenario 1: Reforms lead to expanded access and performance-based healthcare system
• Almost full enrollment of the currently uninsured according to original government estimate
• Rapid movement toward performance-cased system and organization of healthcare delivery
• Increased demand for medicines resulting from increased enrollment, screening, removal of caps, and management of existing conditions
• Cost-effective medicines with clinical value being used more extensively
• Continued premium places on innovative medicines with strong clinical profile
• Total spending on medicines in 2017: $420-460Bn
Scenario 2: Slow pace of change but some expansion in access and incremental changes to payment system
• Initial enrollment of currently uninsured 1/3 of target level, though improvement over time
• Payment system remains largely fee-for-service
• Uncertainty of political support slows or stalls reform implementation
• Modest incremental demand for medicines and primarily for generics
• Incremental pressure by payers and employers limit price increases to current levels at most
• Positioning of competitive medicines primarily based on price
• Newly launched medicines see slow uptake and limited commercial returns
• Total spending on medicines in 2017: $350-380Bn
Scenario 3: Implementation leads to major unintended consequences and change
• Exchanges fail to enroll “young invincibles” and insurance model fails
• Employers move large number of employees to private exchanges
• Significant decline in healthcare utilization for prevention and treatment of chronic illness
• Decline in medicine demand volume • Major reduction in formulary access for
insurance plans or major cost reductions from manufacturers
• Limited acceptance of new medicines with price premium
• Total spending on medicines in 2017: $300-320Bn
The base-case scenario for the Top 5 European markets is for spending growth to be flat through 2017
Safety Value and Innovation Seminar JHU 022414 15
Top 5 Europe Spending and Growth, 2008-2017
-2%
0%
2%
4%
6%
8%
10%
0
20
40
60
80
100
120
140
160
180
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GRO
WTH
CO
NST U
S$ S
PEN
DIN
G U
S$BN
Sales Growth
Forecast
2013-17 CAGR, 0-3%
Source: IMS Health Market Prognosis, September 2013
The economic crisis has had a direct impact on the number of launched products and their uptake
Safety Value and Innovation Seminar JHU 022414 16
NCEs launched vs. market share achieved
Austria
Belgium
Bulgaria
Czech Rep.
Estonia
Finland France
Germany
Greece
Hungary
Ireland
Italy
Latvia Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Slovakia
Slovenia Spain Sweden
SUI
UK
France
Germany
Italy
Spain
UK
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
10 20 30 40 50 60 70 80 90
NCE M
ARKET S
HARE O
F TO
TALR
X M
ARKET
NUMBER OF NCEs (2008-12) LAUNCHED
2008-2012
2003-2007
Countries with low # NCEs and strong penetration
Countries with high # NCEs and low penetration
Countries with low # NCEs and low penetration
EUR average n46 Countries with high # NCEs and strong penetration
Source: IMS Health MIDAS, September 2013
EUR average 2.3%
The base-case scenario for Japan’s spending growth is for a slight acceleration through 2017
Safety Value and Innovation Seminar JHU 022414 17
Japan spending and growth, 2008-2017
0%
2%
4%
6%
8%
10%
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GRO
WTH
CO
NST U
S$
SPE
ND
ING
US$BN
Sales Growth
Source: IMS Market Prognosis, September 2013
Forecast
2013-17 CAGR, 2-5%
Alternative scenarios for Japan’s efforts to dramatically increase the use of generic medicines
Safety Value and Innovation Seminar JHU 022414 18
Generics volume share of the unprotected market by country in 2003, 2008 and 2013
20%
30%
40%
50%
60%
70%
80%
90%
100%
2003 2008 2013
Source: IMS Health MIDAS, September 2013
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
20
40
60
80
100
120
140
160
180
200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GRO
WTH
CO
NST U
S$
SPE
ND
ING
US$BN
Sales Growth
The base-case scenario for China’s spending growth is a slowing trend and stability through 2017
Safety Value and Innovation Seminar JHU 022414 19
China spending and growth, 2008-2017
Source: IMS Market Prognosis, September 2013
Forecast
2013-17 CAGR, 14-17%
Alternative scenarios for the 2017 outlook are driven by the depth of reform implementation in the next 5 years
Safety Value and Innovation Seminar JHU 022414 20
Scenario Reform implementation depth 2017 Implications for Medicine and Spending Growth
Scenario 1: Rapid rise of private insurance
• The rise of private insurance (30-50% uptake in urban areas) will fund >70% of cost for innovative drugs for critical diseases.
• Substantial increases in private hospitals will provide both higher quality healthcare and access to innovative drugs.
• The update of the NRDL in 2014 will increase the coverage of international drugs with price cuts expected to be <15%.
• The EDL usage ratio, which means more local generics in Tier 2 and 3 hospitals, will remain limited.
• Single reimbursement price based on generic pricing will not be implemented.
• CGMP guidelines widely implemented leading to an improvement in the quality of local generics.
• Quality generics will enjoy strong representation in primary care institutions and lower tier cities, while international off patent drugs will retain a price premium and will be widely used in large hospitals and big cities.
• The rise of private insurance will fund on patent branded products prior to their inclusion on the state reimbursement list (which may take years and be a relatively low level of access).
• The rise of private insurance together with a faster regulatory system will result in an expanded on-patent branded market for international companies.
Scenario 2: Moderate change in medicine reimbursement
• Some private insurance (30% uptake or less) will fund 50% of the innovative drugs cost for critical diseases.
• There will be some increase in the number of private hospitals to provide higher quality healthcare but access to new innovative products will be contained.
• The NRDL list will be updated in 2014 but with some delays in implementation and price cuts >15%.
• The actual usage ratio of EDL will increase to be closer to governments targets.
• Single reimbursement price based on generic pricing will be implemented in some provinces.
• CGMP guidelines will be implemented to a lesser degree
• Some private insurance (30% uptake or less) will fund 50% of the innovative drugs cost for critical diseases.
• There will be some increase in the number of private hospitals to provide higher quality healthcare but access to new innovative products will be contained.
• The NRDL list will be updated in 2014 but with some delays in implementation and price cuts >15%.
• The actual usage ratio of EDL will increase to be closer to governments targets.
• Single reimbursement price based on generic pricing will be implemented in some provinces.
• CGMP guidelines will be implemented to a lesser degree
CAGR 2013-17: 15-18%
CAGR 2013-17: 14-17%
Alternative scenarios for the 2017 outlook are driven by the depth of reform implementation in the next 5 years
Safety Value and Innovation Seminar JHU 022414 21
Scenario Reform implementation depth 2017 Implications for Medicine and Spending Growth
Scenario 3: Delays and limited change
• Private insurance will not take off; negligible uptake and funding of new products.
• The NRDL update will be delayed and coverage for innovative products will be limited; The NDRC will implement aggressive price cuts across the board for branded products.
• Despite government efforts to encourage foreign investment in private hospitals, barriers will remain and only a small number of private hospitals will emerge.
• The extensive use of the EDL will result in losses due to tendering of international off-patent brands.
• Single reimbursement price based on generic pricing will be widely implemented.
• CGMP is sparsely implemented to minimal effect.
• China will fail to build a high quality locally sourced off patent segment.
• Private insurance failure will perpetuate the funding gap for innovative agents.
• International off-patent drugs will have a significant drop in usage as the government will only reimburse them at a price equivalent to a local generic.
• The market will remain very difficult for innovative agents, which will have to wait years for a possible NRDL inclusion.
CAGR 2013-17: 12-15%
61%
57%
31%
72%
27%
27%
58%
16%
12%
16%
11%
12%
World
Rest of the world
Pharmerging
Developed
Brand Generic Other
Generics will represent a larger share of the market in volume and value terms
Safety Value and Innovation Seminar JHU 022414 22
Global spending, 2012 and 2017
2012
52%
52%
26%
67%
36%
31%
63%
21%
12%
17%
11%
12%
2017
$622Bn $650-680Bn
$224Bn $370-400Bn
$120Bn $125-155Bn
$965Bn $1,170-1,200Bn
Source: IMS Health Thought Leadership, September 2013
21.0 22.3 26.9 28.4
50.3
19.1 31.7 28.8
20.3 22.6
-18.5 -15.3 -21.5 -22.6
-43.6 -32.1
-17.2 -26.2 -22.5 -15.9
-60
-40
-20
0
20
40
60
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
SPE
ND
ING
SU
$BN
Pre-Expiry Spending Lower Brand Spending
Patent expiries on small molecule products will reduce brand spending on developed markets by $113Bn through 2017
Safety Value and Innovation Seminar JHU 022414 23
Developed Markets Patent Expiry Exposure and Impact
Source: IMS Institute for Healthcare Informatics, September 2013
$149Bn
-$121Bn
$123Bn
-$113Bn
Spending on traditional pharmaceuticals will increase by 5% in developed markets and by 69% in pharmerging markets over the next 5 years
Safety Value and Innovation Seminar JHU 022414 24
Traditional Spending between 2012 and 2017
$453 $448 $450 $459 $466 $476
$199 $218
$244 $273
$302 $336
0
100
200
300
400
500
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
SALE
S U
S$M
N
Developed Markets Pharmerging Markets
Source: IMS Health Thought Leadership, September 2013
Spending on specialty pharmaceuticals will increase rapidly in both developed and pharmerging markets
Safety Value and Innovation Seminar JHU 022414 25
Specialty Spending between 2012 and 2017
Source: IMS Health Thought Leadership, September 2013
$148 $153 $160
$169 $180
$193
$23 $26 $29 $34 $38 $43
0
50
100
150
200
250
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
SALE
S U
S$M
N
Developed Markets Pharmerging Markets
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010 2011 2012 Average Per Year 2013-
2017 Novel Mechanism Existing Mechanism Orphan
Increasing numbers of innovative new medicines and orphan drugs are expected to be launched
Safety Value and Innovation Seminar JHU 022414 26
Global Launches of New Molecular Entities
Source: IMS Institute for Healthcare Informatics, October 2013
GLO
BAL
NM
E L
AU
NCH
ES
Treatment will be transformed by new and existing mechanisms
Safety Value and Innovation Seminar JHU 022414 27
Selected Product Launches 2013-2017
Source: IMS Institute for Healthcare Informatics, September 2013
Disease area Existing mechanisms New Mechanisms
Rheumatoid Arthritis • JAK inhibitor (adelatinib VX-509, baricitinib, fostamatinib)
Cystic Fibrosis • Transmembrane conductance regulator corrector (Lumacaftor, VX-661)
Ribosome interaction for readthrough of nonsense mutations (NM) in NM cystic fibrosis (Ataluren )
Melanoma • BRAF kinase inhibitor (dabrafenib) • MEK kinase inhibitor (trametinib) • Program cell death MAB (nivolumab, lambrolizumab)
• Oncolytic HSV vector (talimogene laherparepvec)*
Breast cancer • Mab (trastuzumab emtansine) • Cyclin dependent kinase inhibitor (palbociclib)
Ovarian cancer • Folate-targeted drug conjugate (vintafolide) • VEGFR inhibitor (nintedanib)
• PARP inhibitor (olaparib)
Multiple sclerosis • Lipophilic molecule (dimethyl fumarate)
Heart Failure • Human peptide synthetic version (ularitide) • Human relaxin-2 hormone recombinant (serelaxin)
Hepatitis C • NS3/4A proteinase inhibitor (asunaprevir, sofosbuvir, simeprevir)
Malaria • RTS,S Adjuvant System (P. falciparum / P.Vivax circumsporozoite protein)
Some of the diseases with highest global burden have fewer new treatment options from recent or forthcoming launches
Safety Value and Innovation Seminar JHU 022414 28
Disease DALYs%
IHD 8.2%
Stroke 4.7%
Depression 4.3%
Lung Cancer 3.5%
COPD 3.2%
Musculoskeletal 3.1%
Diabetes 2.8%
Alzheimer’s 2.3%
Anxiety 1.9%
Colorectal 1.8%
Alcohol Abuse 1.8%
LRI 1.7%
Breast Cancer 1.4%
Osteoarthritis 1.3%
Other Circulatory 1.3%
Migraine 1.3%
Asthma 1.2%
Other Neoplasm 1.1%
BPH 1.0%
Stomach Cancer 1.0%
Disease DALYs% Pipeline Launches
IHD 5.2% 183 191
LRI 4.6% 53 73
Stroke 4.2% 41 45
Malaria 3.3% 17 6
COPD 3.1% 48 24
Depression 3.1% 44 58
Other HIV 2.7% 45 33
Tuberculosis 2.0% 53 5
Diabetes 1.9% 120 89
Neonatal Sepsis 1.8% 4 0
Diarrhoea 1.6% 6 6
Lung Cancer 1.3% 141 18
Musculoskeletal 1.2% 7 6
Anxiety 1.1% 11 11
Alcohol Abuse 1.1% 25 9
Meningitis 1.0% 12 21
Asthma 0.9% 67 29
Migraine 0.9% 21 19
Liver Cancer 0.8% 53 4
Other Neurological 0.7% 14 9
Global High Income Countries
Source: IHME Global Burden of Diseases, Injuries, and Risk Factors Study 2010; IMS Health R&D Focus, July 2013
The availability of new medicines varies widely by country and disease
Safety Value and Innovation Seminar JHU 022414 29
Source: IMS Institute for Healthcare Informatics, October 2013
Total 146 94 59 88 65 70 65 88 63 52 45 42 38 37 % of Total 64% 40% 60% 45% 48% 45% 60% 43% 35% 31% 29% 26% 25% Anti-infectives & Antivirals 16 6 10 7 6 5 3 6 7 3 4 4 1 4 Arthritis/Pain 6 3 3 3 2 3 2 3 2 2 1 1 1 2 Blood 8 6 2 3 3 3 3 5 3 1 2 1 1 Cardiovascular 17 12 8 13 8 11 10 12 8 9 8 5 9 7 CNS 20 13 5 13 10 10 9 12 8 5 5 5 9 5 Dermatology 4 2 2 2 1 2 2 2 1 2 2 1 1 1 Diabetes 5 3 4 3 3 4 3 4 3 3 4 4 4 4 Gastrointestinal 9 4 1 3 2 3 2 4 4 2 1 1 3 GU & Hormones 10 4 3 5 1 5 5 4 1 7 1 Immune System 11 9 3 10 7 8 8 9 6 3 3 5 3 Metabolic 2 1 1 1 2 1 1 1 1 Oncologics 23 19 8 18 16 9 11 19 14 9 8 9 2 6 Ophthalmics 5 4 3 2 1 1 1 2 1 2 3 2 Other 3 1 1 1 1 Respiratory 6 3 4 4 3 4 4 4 3 3 4 3 3 3 Vaccines 1 1 1 1 1 1 1 1 1 1 1 1 1 1
U.S. Korea Canada UK Spain Italy France Germany Japan China Brazil Russia India Global
Global New Molecular Entities 2007-11 Available to Patients in 2012
China will be the second largest market in 2017 and approaching half the size of the U.S. market
Safety Value and Innovation Seminar JHU 022414 30
Rank 2007 Index Rank 2012 Index Rank 2017 Index
1 U.S. 100 1 U.S. 100 1 U.S. 100 2 Japan 27 2 Japan 27 2 China 45 3 France 13 3 China 25 3 Japan 29 4 Germany 13 4 Germany 13 4 Brazil 13 5 China 11 5 France 11 5 Germany 13 6 Italy 8 6 Brazil 8 6 France 10 7 UK 7 7 Italy 8 7 Italy 8 8 Spain 7 8 UK 7 8 Russia 7 9 Canada 7 9 Canada 7 9 UK 7 10 Brazil 5 10 Spain 6 10 Canada 7 11 Mexico 4 11 Russia 5 11 India 6 12 Australia 4 12 Australia 4 12 Spain 5 13 South Korea 3 13 India 4 13 Mexico 4
14 Russia 3 14 Mexico 4 14 South Korea 4
15 Turkey 2 15 South Korea 3 15 Australia 4 16 India 2 16 Venezuela 3 16 Turkey 3 17 Netherlands 2 17 Turkey 3 17 Venezuela 2 18 Greece 2 18 Poland 2 18 Argentina 2 19 Poland 2 19 Argentina 2 19 Indonesia 2 20 Belgium 2 20 Belgium 2 20 Poland 2
Change in ranking over prior 5 years
1
1
2 1
1
3
2
1
3
11
1
1
8
4
2
2
4
1
1
2
3
3
3
2
8
2
9
1
1
3
1
1
1
1
2
1
2
1
1
3
1
2
1
1
8
2
Source: IMS Market Prognosis, September 2013
Region and leading country spending
Safety Value and Innovation Seminar JHU 022414 31
Source: IMS Market Prognosis, September 2013
US$ billions 2012 2008-2012 CAGR 2017 2013-2017 CAGR
Global 965.4 5.4% 1,170-1,200 3-6% Developed 621.6 2.9% 650-680 1–4% U.S. 328.2 3.0% 350-380 1–4% EU5 148.7 2.4% 140-170 0–3% France 36.7 0.3% 30-40 (-2)–1% Germany 42.1 3.8% 41-51 1-4% Italy 26.2 2.9% 23-33 0-3% Spain 19.9 1.7% 13-23 (-4)-(-1)% UK 23.9 3.4% 20-30 1-4% Japan 111.3 3.0% 90-120 2-5% Canada 22.0 3.1% 20–30 1-4% South Korea 11.3 6.3% 10-20 3-6%
Pharmerging 223.9 15.0% 370-400 10-13% China 81.7 22.3% 160–190 14-17% Tier 2 59.6 15.6% 90–110 10-13% Brazil 28.5 14.6% 38-48 11-14% Russia 17.1 17.7% 23-33 8-11% India 14.0 15.1% 22-32 11-14% Tier 3 82.6 9.4% 100-130 5-8% Rest of World 120.0 4.7% 125-155 2-5%
Implications and discussion
• Medicine spending growth rebounding across developed economies and tapering of “patent dividend” over next five years will bring new dynamics to the medicines marketplace
• Spending growth of 10-13% CAGR across pharmerging countries brings extraordinary stresses to funding and healthcare delivery systems
• Recent and future novel therapies bring new options and dynamics to treatment of multiple therapy areas including diabetes, hepatitis C, melanoma, multiple sclerosis and thrombosis/acute coronary syndrome
• Role and penetration of generic drugs remains very uneven across developed markets even as policy levers are being applied
• Levels of spending on new NCEs are at historically low levels bringing inadequate returns to investment capital
• Visibility of $1 trillion medicine cost is high – but not the context and impact on healthcare systems or patients
Safety Value and Innovation Seminar JHU 022414 32
The Trillion Dollar Market for Medicines: Characteristics, Dynamics and Outlook
Johns Hopkins Bloomberg School of Public Health Center for Drug Safety and Effectiveness Safety, Value and Innovation Seminar
Murray Aitken Executive Director www.theimsinstitute.org [email protected]
February 24, 2014