Experts Predict Pharmaceutical Market Will Reach $793 Billion by 2015, Representing 6.6% Growth from 2010!--h2>
The line between pharmaceutical and biopharmaceutical companies has blurred to the point of no longer being distinct. Specialist companies such as Amgen and Genzyme are now competing with a growing number of pharma companies. Top pharma firms such as Pfizer, Merck, and Novartis increasingly view themselves as biopharma/pharma companies and over the past five years have pursued strategic acquisitions and partnerships with biotech companies and/or advanced biological programs through their own in-house research efforts.
The result of all this interest in biologics? A bevy of potential products that we believe will have near-term market impact.
About 50 companies produce almost all of the revenue in the pharmaceutical market and all of them need new products to fuel growth. The top companies have approximately 550 projects in late-stage development. These programs are broken down by therapeutic category in the Figure.
Drugs in the oncology segment are expected to have a significant impact on current markets, increasing competition and providing advanced alternatives to current therapies. Many oncology drugs are monoclonal antibodies or other biologic therapies. Development projects also abound in the cardiovascular and blood, neurotherapeutics, respiratory and inflammation, and infectious disease areas.
The global pharmaceutical market is now worth approximately $600 billion (at the manufacturer’s level) and the United States accounts for roughly 40–50% of the world market. Even during economic recessions the industry has moved forward. An increase of 5% is expected globally in 2010.
Cardiovascular programs, led by products like Lipitor, Plavix, and Diovan, have enviable revenues, with sales of $112 billion estimated for 2010. Oncology, however, is the fastest growing segment. This is largely due to the growing number of adjunctive therapies and high-cost of effective biotherapies. Sales have increased from an estimated $30 billion in 2005 to $65 billion forecasted for 2010.
Not surprisingly, many top pharmaceutical companies have included biologic cancer treatments as part of new projects, and many of these are in late-stage development.
Pfizer has 34 Phase III programs (includes products with multiple indications) including Sutent for four major cancer indications, Axitinib for renal cell carcinoma, and Bapineuzumab for Alzheimer disease.
Merck has 19 products in Phase III including treatments for diabietes, ragweed allergy, and glaucoma. Novartis has 32 products in Phase III including treatments for gastric and breast cancer.
Roche has 31 products in Phase III, most through its Genetech division.
As these late-stage projects are approved and commercialized, they will boost an already growing market. We estimate late-stage cancer projects will add $25 billion to the market by 2015. Overall, Kalorama Information predicts growth of 6.6% in the pharmaceutical market over the next five years, resulting in a $793 billion pharmaceutical market by 2015. We can contrast this with 5.2% growth between 2005 and 2010. The enhanced growth in the industry reflects the impact of R&D efforts.
The industry has not needed encouragement to turn to biologics, but legislation in the recent healthcare reform bill may offer additional impetus.
Effective immediately, the Approval Pathway For Biosimilar Biological Products permits biologics to maintain 12 years of market exclusivity after FDA approval, allowing biotech drug developers an opportunity to recoup high R&D costs and build profits for new medications before low-cost generic equivalents are introduced.
The Therapeutic Discovery Project Credit provides a 50% tax credit for qualified biotech investments for tax years 2009 and 2010, or a grant for the same amount tax-free. Eligible companies include small and mid-sized (under 250 employees) biotech firms. This would permit some of the costs of preclinical research, clinical trials, and other research protocols to be reduced. The legislation presages continued biopharmaceutical development.