The volume of total U.S. dispensed prescriptions was up significantly over 2004, growing 4.7 percent after adjusting for longer-duration mail order prescriptions. Prescription product sales at wholesale prices and dispensed prescriptions are derived from the IMS National Sales Perspectives(TM) and IMS National Prescription Audit(TM) offerings, respectively.
“Importation is no longer as significant a market issue as it was two years ago”
"The pharmaceutical market continues to experience solid growth and is poised for stronger returns in 2006," said Diana Conmy, corporate director, Market Insights, IMS. "Prescription volumes are increasing, demonstrating growing demand for pharmaceutical products at lower prices than the market has sustained in the past. We expect this trend to continue throughout this year as millions of seniors begin receiving prescription drug coverage under Medicare."
Growth Factors
Biotech products remained a major growth engine in 2005, with sales increasing 17.2 percent to $32.8 billion. Contributors to this growth included Aranesp(R), Enbrel(R), and Neulasta(R), all from Amgen, as well as Genentech's Rituxan(R).
Within the biotech market, a number of new Rheumatoid Arthritis (RA) drugs were launched successfully over the last few years, including Amgen's Enbrel(R), Centocor's Remicade(R), and Abbott's Humira(R). Growth within this class of drugs is expected to continue: An analysis of health claims data by PharMetrics, a unit of IMS, showed that only 10 percent of patients diagnosed with RA are treated with one of these drugs. In addition, many of these products also are approved for multiple indications -- usually other auto-immune disorders -- and 26 percent of patients with RA also have another auto-immune disorder.
Generics, traditionally a volatile segment of the pharmaceutical market, posted strong sales growth last year of 20.6 percent. Growth was driven by the continued ramp-up of the 2004 generics launches of gabapentin, oxycodone HCl ER, bupropion HCl SR and quinapril HCl, and 2005 generic introductions of azithromycin, fexofenadine and transdermal fentanyl.
"The growth of generics demonstrates the increasing influence that third-party payors are exerting as they switch patients to lower-cost therapy options," said Marc Benoff, practice leader, Pricing and Market Access, IMS.
Other factors influencing 2005 pharma market performance include fewer new chemical entities (NCEs) approved than expected; fewer and lower-performing product launches; the decreasing use of Cox-2 class products; and more aggressive generics launches.
Medicare and Importation
In 2005, seniors (65 years and older) continued to grapple with multiple Medicare discount card choices, leading to low participation in the program. During 2005, 46.4 million prescriptions, or approximately 1.5 percent of all retail prescriptions, were dispensed through the discount card program. Despite relatively low uptake, the cards were effective in lowering users' prescription costs, with $601.1 million in savings achieved through the program.
The introduction of the Medicare prescription drug benefit in 2006 is expected to provide millions of Americans with a prescription drug benefit. Despite initial system implementation and transition challenges, IMS continues to forecast a 1-to-2 percent increase in sales revenue this year as a result of the Medicare benefit. Already in the first four weeks of 2006, IMS reports that more than 18 million retail Medicare Part D prescriptions have been dispensed. For the 65+ population, prescription volumes are up 4-to-5 percent over the same period last year.
"The Medicare drug benefit is one of the most significant changes in the healthcare industry in decades," Benoff continued. "While there will be a small near-term benefit to the market, we expect many long-term opportunities, as well as challenges, including downward pressures on pricing and a greater push to generics utilization."
While drug utilization is growing through the Medicare benefit, cross-border importation of medicines from Canada from Internet pharmacies has fallen significantly. Internet pharmacy traffic fell 23 percent in 2005 to $349 million, down from $456 million in 2004 (measured in US dollars). "Importation is no longer as significant a market issue as it was two years ago," observed Benoff.
New Products
Fewer new products were introduced in 2005. After registering a six-year high in 2004 of 36 new molecular entities, the number of approvals declined to 20 in 2005. Among the notable new products launched in 2005 were several potential blockbusters (over $1 billion in annual sales), including Eli Lilly's Byetta(TM) (for treating type 2 diabetes), Pfizer's Lyrica(TM) (for neuropathic pain and seizures), and Sepracor's Lunesta(TM) (for long-term treatment of insomnia).
A number of products launched in 2004 also experienced higher adoption rates among patients, including Merck/Schering-Plough's Vytorin(TM) (for cholesterol reduction), Eli Lilly's Cymbalta(R) (for depression and diabetic peripheral neuropathic pain) and Genentech's Avastin(TM) (for treating colorectal cancer).
Market Outlook
IMS forecasts that the U.S. pharmaceutical market will continue to grow at a compound annual growth rate of 5-8 percent over the next five years. This growth will be sustained by new product launches, recovery from Cox-2 withdrawals and increased utilization through Medicare Part D.
Seven new products with potential global blockbuster status are expected to launch in the U.S. in 2006, including a number of standouts: Sanofi-Aventis' Acomplia(TM) (for obesity), Pfizer's Sutent(R) (for cancer), Pfizer's Exubera(R) (inhaled insulin for the treatment of type 1 and type 2 diabetes), and Pfizer/Neurocrine Biosciences's Indiplon(TM) (for insomnia). These new product introductions will help offset some of the $18 billion in sales at risk for products losing patent protection in 2006.
"The U.S. market's continued success this year will depend largely on enrollment in the new Medicare benefit, the ability to overcome safety concerns, and new product launches to make up for the higher level of patent expirations," observed Conmy. "New strategies will be needed by pharmaceutical manufacturers to meet the challenges of this environment."
Top-Line Market Statistics and Summaries
IMS charts detailing 2005 U.S. market performance by categories that include distribution channels, therapy classes, prescription products and companies can be viewed on the IMS website at www.imshealth.com/media. Among the highlights:
U.S. Prescription Distribution Channels:
-- The mail service channel grew more rapidly than retail distribution channels for U.S. prescription drugs in 2005; however, rates of mail order growth are expected to slow and retail growth to increase in 2006.
Leading U.S. Therapy Classes:
-- Cholesterol reducers remain the top therapeutic class and are achieving above-average growth.
Leading U.S. Prescription Products by Sales:
-- Pfizer's Lipitor(R), a cholesterol reducer, remains the highest-selling product in the U.S. for the fifth consecutive year, while AstraZeneca's Nexium(R), Sanofi-Aventis/Bristol-Myers Squibb's Plavix(R), Amgen's Enbrel(R), and Amgen's Aranesp(R) all delivered double-digit growth.
Largest Pharmaceutical Companies by U.S. Prescription Sales:
-- The rank order by U.S. sales of the top five pharmaceutical companies in 2005 remains unchanged, with Eli Lilly joining the top ten.
About IMS
Operating in more than 100 countries, IMS Health is the world's leading provider of market intelligence to the pharmaceutical and healthcare industries. With $1.8 billion in 2005 revenue and more than 50 years of industry experience, IMS offers leading-edge business intelligence products and services that are integral to clients' day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and over-the-counter offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. Additional information is available at http://www.imshealth.com
Trademarks referenced in this press release are the marks of their respective owners.
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