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Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

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IHS Healthcare and Pharma offers up the top 10 drivers of the pharma and healthcare industry for 2014. The global economy, the patent cliff, emerging markets, Japanese innovation, ObamaCare, IRP, and drug shortages to name a few...

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Page 1: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

Gustav Ando Director Healthcare and Pharma

Key Industry Drivers for 2014

IHS Healthcare and Pharma

Page 2: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

1. The foundations for economic recovery continue to be in place

• The global economy is expected to see a recovery in 2014 and 2015. However, there is a marked shift in dynamics over where the growth is expected. Average growth in emerging markets has fallen steadily to 4.7% in 2013, while the outlook for advanced markets is stronger than it has been for many years.

• Add to this the scarring experience several pharmaceutical companies had in China–amid a clampdown on marketing practices–and we see several significant players deciding to reset their agenda in emerging markets.

• While much attention is focused on the detrimental impact of healthcare reform in general, the impact will be felt hardest in key European markets –especially Germany, France, UK, Southern Europe and the Nordics. Interestingly, the global pharmaceutical industry continues to be heavy dependant and focused on these regions.

Page 3: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

2. The United States’ first full year of ACA

• The focus has been on the stuttering implementation of Medicaid expansion – amid continued political resistance. Midterm elections will be critical in deciding how fast – or slow – implementation will happen.

• The bulk of the patent cliff is over, meaning that the market will return to being driven significant increases in pharmaceutical prices

• Health spend will grew 5% in 2013 and is expecting to rise above 6% in 2014 – our assumptions are based on a more gradualistic impact of Medicaid expansion than for example CMS (which subsequently revised its estimations).

• Pharmaceutical prices declined dramatically in September 2013 and there is more pushback from payers on pricing.

Page 4: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

3. Europe/Eurozone instability will continue to suppress public health expenditure

• Greece and Italy will experience negative and lower growth (respectively), with Italy implementing its spending review. Spain is also declining significantly due to co-payments and procurement.

• Health spend will grow significantly in France with newly implemented price cuts, prescription controls, and a focus on home care. The transition to ITR is having a significant impact.

• Germany has abandoned the retroactive benefit assessments, but looks to prolong price freezes, and there may be other non-AMNOG-related reforms.

• UK’s VBP pushed towards the end of the year

Page 5: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

4. Secondary emerging markets are expanding healthcare insurance

• The Philippines continues to be a fast-growing market, and a law introducing universal health was enacted by President Aquino in June 2013.

• Indonesia's universal healthcare coverage was launched on 1 January 2014 with a goal of 100% coverage in five years for the world's fourth most populous country. The universal healthcare system, Jaminan Kesehatan Nasional (JKN), will transform Indonesia from a primarily self-paid market to an insurance-driven healthcare market.

• Markets such as Nigeria, UAE and Qatar are also expanding their insurance coverage.

Page 6: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

5. Reimbursement continues to offer a mixed picture

Page 7: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

• 2014 will be a comparatively quiet year among patent expirations following the turbulent 2011-2013 period.

• The patents to expire include drugs such as Temodar, Evista, Avelox, Nasonex, and Nexium.

• In the biosimilars space, there are more potential negative drivers with challenges to Herceptin, Lantus and Rituxan in Europe.

6. Patent expirations continue to be a significant driver, but it is a comparatively quiet year

Page 8: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

7. IRP baskets continue to evolve

• Portugal has already changed its basket and there could be changes in Turkey.

• Increasing fears that prices in New Zealand and South Korea could trickle into much more important markets.

• Price harmonisation efforts in GCC (collective procurement starting 2014) and Baltics.

• Colombia is launching its new reference pricing system which will target patented and generic drugs, whilst Mexico is looking at international reference pricing in 2014 during next round of negotiations.

Page 9: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

8. Drug shortages will continue, but clampdowns on parallel exports are seen in many countries

• Drug shortages will increase due to parallel export—with several countries (Greece, Czech Republic, Slovakia and Romania, among others) banning exports of certain drugs.

• Italy and Bulgaria are also looking to curb parallel exports. Poland has highlighted the issue as an area of growing concern.

• Whilst parallel trade continues to be a significant negative driver, governments are beginning to realize the negative consequences on a stable supply of essential pharmaceuticals

Page 10: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

9. Price cuts in Japan – but some incentives for innovation

• The government has concluded that the average price cut rate in April 2014 will be 5.7%—excluding the impact of a sales tax hike.

• However, Japan remains one of the few major markets where there are constructive discussions around increasing the reward for innovation.

• The country is continuing its pilot programme of exempting innovative products which fulfil certain criteria from the price cuts – although it backed down from its December 2013 proposal to turn the pilot programme into a permanent fixture on the market.

Page 11: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

10. New technology developments

• At the tail-end of 2013, the FDA approved Gilead’s Sovaldi (sofosbuvir), the first approval of an all-oral, interferon-free combination therapy in hepatitis C. Whilst J&J’s NS3/4A protease inhibitor Olysio was approved the month before, Sovaldi’s approval very much sets the tone for the new drug catalysts in 2014, and it is the biggest new drug launch that the industry has seen for some time.

• 2014 is generally felt to be a transformational year for immunotherapies and drugs targeting PD-1. Two therapies are in the final stages of development here: Bristol-Myers Squibb’s (BMS, US) nivolumab and Merck & Co’s MK-3475.

Page 12: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

Recent Multi-Client Studies

• Flexible Pricing Strategies: Maximizing Value across the Pharmaceutical Product Lifecycle

• Tiered Pricing Strategies in the Global Pharmaceutical Industry: Matching Prices with Local Market Conditions

• Pharmaco-economic Evaluation and ITR Reforms in France: Optimising Market Access Strategies

• Drug Price Erosion: Safeguarding Pharmaceutical Assets Against Value Attrition

• International Reference Pricing: A Strategic Guidebook to the New Global Pharmaceutical Pricing Paradigm

• Biosimilars and Non-Innovator Biologics in Emerging Markets: Payer, Regulator, and Pharma Strategies

• European Pharmacovigilance Reform: Implications for Market Access Strategies

• Payer-Industry Partnerships in the Emerging Markets: Best Practices for Successful Market Access of New Pharmaceuticals

• The New REAlity of Relative Effectiveness: An International Comparison of Evolving Requirements

• Optimising Medical Device & Diagnostic Launches: A Country-Specific Analysis

• Payer-Industry Partnerships: Best Practices for Successful Market Access of New Pharmaceuticals

Page 13: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

1. The foundations for economic recovery continue to be in place

IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

Learn more

Get weekly insights on global healthcare policy, market access, pricing and reimbursement and R&D

www.ihs.com/healthcareblog

Page 14: Top 10 pharma industry drivers for 2014 by IHS Healthcare & Pharma

Gustav Ando Director Healthcare and Pharma [email protected]

Contact us

IHS Healthcare and Pharma