Five factors that will shape the future of the pharmaceutical industry

Publication Date	October 2006
Publisher	Datamonitor
Product Type	Report
Pages	9
ISBN Number	not applicable
Product Code	DAT04220

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Summary

Introduction

This brief provides five key predictions for the trends shaping the pharmaceutical market in 2007 and beyond, and explains the impact of these predictions on the industry. Predictions discussed include the continued influence of M&A and licensing, the increasing impact of cost containment policies by payers and an increasing reliance on biologics to drive growth.

Scope

An overview of the drivers and impact of increasing generic penetration in the major pharmaceutical markets
A summary of our analysis of Big Pharma's increasing reliance on biologic therapies to drive growth
A review of the expected impact of Medicare Part D on the US pharmaceutical market over the next few years

Highlights

Within the next five years an estimated $80 billion in 2005 product sales will be exposed to generic competition. The focus of payers on encouraging generic penetration will increase the impact of these patent expiries on branded pharma, and generate a favorable environment for generics companies to drive growth

As patent expiries increasingly impact small molecule blockbusters the pharmaceutical industry is focusing more heavily on biotechnology to drive future growth

Reasons to Purchase

Understand the key trends shaping the pharmaceutical market over the coming years
Gain insight into our predictions for the future impact of key trends

Content

Catalyst
Summary
Methodology
- AnaLYSIS
- Inorganic growth strategies such as M&A and licensing activity will drive growth for pharmaceutical companies
- M&A activity has contributed to pharmaceutical companies' revenue growth over the last five years
- Mid-Pharma could experience the next wave of consolidation
- In-licensing is becoming a popular strategy
- Government and payer cost containment measures will exert downward pressure on profitability
- HTAs will become increasingly important
- It will become more difficult to obtain a premium price in certain countries
- With cost-containment becoming more widespread, companies will find it increasingly difficult to obtain returns
- Several factors are expected to lead to a rise in the use of generics
- Rising healthcare expenditure will drive generic use
- Over $157 billion of 2005 branded sales will be exposed to generic competition by 2015
- The aging population will drive future uptake of generic drugs
- Biologics will act as the key driver of growth within Big Pharma, accounting for 60% of sales growth to 2010
- Biologic growth is expected to outpace that of the small molecules
- Monoclonal antibodies are seen as key growth driver
- Part D is set to have a major impact on drug prescription in the US
- Part D will boost the share of total pharmaceutical spending accounted for by Medicare to 28%
- Part D issues are changing market dynamics
- The donut hole may persuade beneficiaries to use generics
Appendix
Further reading
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