The stagnation in Europe comes as the US and so-called ‘pharmerging’ markets, which include the BRIC (Brazil, Russia, India and China) countries, are expected to account for more than 60% of sales and 80% of growth worldwide over the next five years, IMS predicts.
“The branded generics market in Europe is virtually over,” Lewis said, noting the increasing commoditization of the market. “The generic space is becoming even more fragmented because of the number of local and regional players,” he said, noting the moderate shift of such small, relatively unknown players from 71% of the market to 75% between 2009 and 2015.
The pharmaceuticals market on the whole is becoming increasingly specialized, he added, noting there’s been a serious downturn for money for patented products in both the EU and Japan, especially as cost-cutting agencies like those in the UK and Germany continue to bargain for more effective products at a lower cost.
“In Europe virtually all of the growth will be in specialty pharma (94%),” Lewis added, noting that’s higher than any other region. He defined ‘specialty’ as mostly injectable, large molecule drugs with high costs.
But luckily for Europeans, the vast majority of late-stage pipelines are focused on specialty oncology products, with 137 such compounds, about half of which are biologics, Lewis said. “The challenge we have is that hospitals cannot bear the cost burden…[and] the easy pickings are over in terms of savings for payers,” he added.
Pace of Innovation
And as far as the future is concerned, Lewis expressed skepticism that the last five years of innovation can be repeated in the US.
Driven by greater FDA responsiveness to innovation, the US markets rebounded strongly in 2014, he said, with a pace of innovation over the last five years that probably equals the pace of innovation over the past 10-15 years.
Despite some lowering of expectations for pharma, the biotech industry is seeing a completely different story. The influx of biotech cash in both the US and EU was at its highest level ever in 2014, Glenn Giovanetti, Ernst & Young global life science leader, told participants.
A report from E&Y expected to be released later this year also reveals that strong growth of commercial leaders will continue, but with increasing pricing headwinds.
“Clinical news flow will continue to drive the market,” Giovanetti added, noting he does not expect any dramatic changes at the US FDA.