The global pharmaceutical market will grow 2.5%-3.5% by value this year, in constant-dollar terms, IMS Health is now projecting, slicing two percentage points off the forecasts which it made last October for 2009.

In October, the firm had projected that world sales for this year would exceed $820 billion but it is now putting the figure at $750 billion, as deterioration in the global economic environment continues to affect market demand, plus the ongoing effects of currency fluctuations.

Nevertheless, the sector will feel the effects of the world economic downturn less keenly than other industries, and will start to rebound from 2010, although 2011 and 2012 will see an unprecedented level of potential patent expiries, according to IMS’s latest Market Prognosis forecasts, which put the global compound annual growth rate (CAGR) for pharmaceutical market growth at 3%-6% in the five years to 2013.

"There is a clear correlation between demand for medicines and key macroeconomic variables such as Gross Domestic Product (GDP), consumer spending and government expenditures," said Murray Aitken, senior vice president, Healthcare Insight at IMS. "We see the worldwide financial crisis contributing to record-low sales growth this year. The pharmaceutical industry is not recession-proof, but it is insulated to a greater extent than other industries where spending is more discretionary."

A key market dynamic picked up by IMS' latest projections is that the economic impact's effect on each market is influenced both by the healthcare cost burden borne by patients and the short- and long-term policy responses that governments implement. Countries where patients directly pay a high portion of their drug costs - such as China, Brazil and the USA - are already seeing the impact of changing consumer spending behaviour, while in more publicly funded markets - eg Turkey, Japan and France - policy responses may differ, and can include stimulus programs that can have an indirect positive impact on pharmaceutical market growth, or the imposition of price cuts in response to budgetary constraints.

In aggregate, expectations for 2009 economic growth in the world’s 15 key developed and emerging countries have declined 3.4% since IMS’s October 2008 forecasts, driving most of the two percentage point fall in its forecasts for 2009.

IMS believes that the US pharmaceutical market will contract this year, with sales dropping 1%-2%, a historic low. Growth will return during parts of the five-year forecast period, but the overall CAGR will be essentially flat. As the cost of medication shifts increasingly to consumers, they are having to make difficult decisions about starting or continuing treatment. Government policies may bolster demand for medicines over the period, but the expiration of several blockbusters in 2011 will impact growth to 2013.

Meantime, a new world order is apparent as the seven nations which IMS has dubbed “pharmerging” markets – China, Brazil, Mexico, South Korea, Turkey, India and Russia - are set to grow 13%-16% overallover the next five years, contributing more than half of global market growth in 2009 and sustaining an average 40% contribution to 2013. China, which is currently the sixth-largest pharmaceutical market, will become the third largest by 2011. The pharmerging markets also will experience some volatility due to the economy, and local responses will vary.

On the other hand, mature markets will contribute lower growth. The CAGR for developed markets - Japan, France, Germany, Italy, the UK, Spain and Canada - will be 1.4% over the next five years. Each market reflects a unique set of mechanisms to manage healthcare access and costs, including a growing emphasis on regional decision-making, promotion of generic drug usage and price reductions, says IMS.

Finally, it says, many of the upcoming innovative treatment launches will be aimed at narrow patient populations. Of the 50-60 new chemical or biological products due for launch over the next two years, about two-thirds will be specialist-driven, and many are aimed at niche indications and narrow patient populations. This year will see new treatment options for diabetes, rheumatoid arthritis, psoriasis, insomnia, thrombosis, acute coronary syndrome, various types of cancer and meningitis. Potential launches in 2010 include therapies for resistant hypertension, osteoporosis, asthma, chronic obstructive pulmonary disease (COPD) and pneumococcal disease. Some of these products are first-in-class with novel mechanisms of action, while others offer different modes of treatment likely to improve efficacy and patient compliance, says IMS, which also notes that the expected launches this year and next will include 6-10 potential blockbusters.