M. Ward (Script) summarises IMS 2015 forecast -

Emerging markets and generics are forecast to be the only bright spots for the global pharmaceutical market in the next five years.

Spending on medicines will continue to slow down from the 6.2% per year witnessed between 2005 and 2010 to just 3-6% in the next five years. By 2015, the world's medicines bill is expected to reach nearly $1.1 trillion, up from an estimated $856 billion in 2010 and $605 billion in 2005. Absolute growth is expected to be $210-240 billion in the five years 2011-2015, compared with $251 billion between 2006 and 2010.

The largest segment of growth in the next five years is anticipated to be the emerging markets, driven by increased access through reforms and economic growth. Indeed, emerging markets – representing 17 high growth markets led by China -- will see their share of the global drugs market rise from 18% in 2010 to 28% by 2015.

Indeed, China is likely to overhaul Japan has the world's second largest pharmaceuticals market by 2015. Over the same time period, European and US spending on pharmaceuticals is forecast to decline from 24% to 19% and 36% to 31%, respectively.

IMS is forecasting that the so-called emerging markets will see their pharmaceutical spending rise from $154 billion in 2010 to $298 billion by 2015; in 2005, IMS estimates, emerging market spending on drugs was just $73 billion, representing a 12% share of the $605 billion market. Of the total increase in spending by these markets, approximately 20% is expected to come from branded products.

Consequently, the rapid growth in emerging markets is largely from spending on generics which will contribute to the rise in the generic share of the total medicines bill. Global generics spending is expected to hit $400-430 billion by 2015, up from an estimated $234 billion in 2010 and $124 billion in 2005.

Patent expiries will reduce the spending on branded drugs by $120 billion between from 2011 through to 2015, offset partially by $22 billion of expected generic spending of the same medicines. Patents are expected to expire in one or more developed markets for 11 of the top 20 selling drugs by value. Blockbuster drugs due to be affected include Pfizer's Lipitor, Bristol-Myers Squibb's Plavix, GlaxoSmithKline's Advair Diskus, and AstraZeneca's Nexium and Seroquel. Consequently, while brands accounted for nearly two thirds of global pharmaceutical spending in 2010, as patents expire in developed markets, that share will fall to just 53% in 2015.

While it is clear that cost containment and access to medicine schemes will put a brake on drug spending growth rates, there are some areas where the industry will see more robust increases. Global biologics spending is forecast to grow from $138 billion in 2010 to $190-200 billion in 2015, representing an average annual growth rate of 6-9%. Significantly, planned new European approval guidelines, expected later this year, are expected to boost biosimilars uptake from $311 million in 2010 to up to $2.5 billion in 2015.

While specialty medicines will experience continued growth in the medium term, driven by novel mechanisms and improved efficacy, growth will decelerate in most therapy areas owing to patent expiries and the lack of significant new treatment options. Oncology will still account for the largest amount of money in a therapy area at an estimated $75-80 billion by 2015, up from $57.1 billion in 2010.