IMS has predicted a slowdown in the growth of the overall global pharmaceutical market to 6%-7% in 2006, compared with 7%-8% for the current year, while the top five European markets will manage a growth rate of just 4%-5%.

But the generics sector will forge ahead, increasing to around 18%-19% of the total drug spend, from 12%-13% in 2005, according to the company. Total sales for the drug sector will reach $640-$650 billion dollars.

The key issues affecting the European marketplace include an expansion of the reference price system and national efforts to encourage generic prescribing, but this decelerating effect will be offset – at least in part – by new product introductions, disease awareness programmes and increased spending on public health, says IMS.

The USA will continue to drive pharmaceutical growth, expanding by 8%-9% in 2006 compared to 6%-7% this year, helped by the launch of the US Medicare drug benefit that will expand senior’s access to medicines and a ‘rebound’ effect after the scandals surrounding the safety of the COX-2 inhibitors.

But the big growth story lies in China, where the market is expected to vault forward 17%-18% to a value of $13-$14 billion in 2006, as a result of the underlying economic growth in the country and continued roll-out of a national reimbursement drug list. But price cuts and cost-containment will also be a feature of the Chinese market in 2006, said IMS.

For Japan the picture is less rosy, with growth pegged back at no more than 1%, down from 5%-6% in 2005, as the effects of the mandated price cuts and the National health Insurance reimbursement changes continue to bite.

For the first time, cancer drugs will overtake the cholesterol-lowering class as the top-selling therapy category, with turnover of $35 billion next year, notes IMS. And above-average growth is also expected for the angiotensin-II receptor antagonists, platelet aggregation inhibitors and osteoporosis treatments.

Pharmaceutical manufacturers must take decisive action in a number of areas to respond to the changes in market conditions and shifts in their product portfolios, according to IMS Health. These include: reassessing sales and marketing spend levels and practices accelerating safety surveillance; investing in health outcomes and pharmacoeconomic studies; and pursuing growth in emerging markets such as China, Latin America and Eastern Europe.

”Collectively, the Industry must continue its efforts to enhance its public image and demonstrate its commitment to the advancement of health care, and also consider carefully how to adapt its business model to sustain growth worldwide, said Murray Aitken, senior vice president, corporate strategy, at the company.

"Market conditions are changing, governments' span of control is growing and future success will only be achieved by those manufacturers with innovative products, demonstrable cost-effectiveness and productive, evidence-based sales and marketing approaches," he added.

- Meanwhile, IMS and Dutch market research group VNU have been forced to re-appraise their 6.3 billion-euro merger plans in the face of strong shareholder opposition, according to a report in the Financial Times. The newspaper suggests that the companies are looking at re-drawing the terms of the merger, or even abandoning it altogether.