The slowdown, which follows a 10 per cent rise in 2003 and 9 per cent in 2002, is the lowest increase in six years, suggesting that the pressure on the drug industry, which has had a trickle-down effect on companies supplying goods and services to pharmaceutical manufacturers, shows little sign of abating.
Murray Aitken, IMS Health's senior vice president for corporate strategy, said that while this is the first year that global pharma sales have passed the $500bn threshold, the market is increasingly being affected by efforts to cut healthcare costs by payers, such as the greater use of generic drugs, which now account for 30 per cent of volume consumption in the US, Canada, Germany and the UK.
Other factors include higher regulatory hurdles that are making it harder for companies to bring new drugs to market, and safety issues that have led to product withdrawals. Notably, the latter has claimed some high profile casualties including big-selling medications such as Merck & Co's Vioxx (rofecoxib) and Bayer's Lipobay/Baycol (cerivastatin).
North America accounted for nearly 45 per cent ($248bn) of worldwide pharmaceutical sales in 2004, reinforcing its position as the world's largest market, and was also the fastest-growing of the top three regions with a rise of 8 per cent. The European Union ranked second with $144bn, up 6 per cent, while third-placed Japan managed a more modest 2 per cent rise to $58bn, reflecting the government-imposed pricing pressures that have dealt a heavy blow to the domestic sector.
China fastest-growing market
Non-EU regions of Europe managed a 12 per cent hike to $8bn, but the biggest increase around the globe was seen in China, up 28 per cent to $9.5bn. "At a time when pharmaceutical growth is moderating in North America, Europe and Japan, China has emerged as a significant growth market, which will support sustained global growth in the future," said Graham Lewis, IMS vice president, strategic consulting.
For 2005, IMS is forecasting moderate sales growth in the US and western Europe, with increases of about 10 per cent in Asia, Latin America and European countries which are not members of the EU.
Looking at growth by therapeutic category, IMS found that five - cholesterol and triglyceride reducers, angiotensin II receptor antagonists for hypertension, anticancer drugs, antipsychotics and drugs for epilepsy - managed increases in the double digits. The AIIRAs grew the fastest at 22 per cent, followed by epilepsy drugs up 18 per cent.
Cholesterol and triglyceride reducers remained the top category with sales up 12 per cent to $30bn, followed by anti-ulcerants up 1 per cent to $24bn. Anticancer brushed past the antidepressant category with a 17 per cent leap to $24bn.
The top five drugs for the year were headed by two cholesterol reducers - Pfizer's $12bn drug Lipitor (atorvastatin) and Merck & Co's Zocor (simvastatin) with $5.9bn in sales, a decline of nearly 7 per cent, Sanofi-Aventis and Bristol-Myers Squibb's Plavix (clopidogrel) powered into third place from eighth in 2003 with a 31 per cent jump to $5bn. AstraZeneca's anti-ulcerant drug Nexium (esomeprazole) ranked fourth, followed by Eli Lilly's schizophrenia treatment Zyprexa (olanzapine), both with $4.8bn in sales but Nexium growing 25 per cent while Zyprexa slipped back 3.5 per cent.
Meanwhile, more 'blockbuster' drugs - those making more than $1bn a year - are biologics. IMS said that 82 drugs qualified as blockbusters in 2004, 11 of which were biologics. Overall, biologics accounted for about 10 per cent of all worldwide drug sales in 2004.