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‘Third World’ Drug Sales to Reach $400B by 2020—IMS

http://www.reuters.com/article/marketsNews/idCNTL2777827620080227

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LONDON, Feb 27 (Reuters) - Emerging markets will be an increasingly important driver for pharmaceutical sales, with sales set to reach $400 billion by 2020, as growth slows in the developed world, according to IMS Health.

That business is equivalent to the revenues generated today from the United States and Europe's top five markets combined, IMS analyst Murray Aitken told an Economist conference on Wednesday.

The healthcare information provider forecasts growth of 12-13 percent a year in countries including China, India, Brazil, Russia, Mexico, South Korea and Turkey, while mature markets grow at a meagre low single digit percentage rate.

By 2020, emerging markets will contribute more than 50 percent to worldwide pharmaceutical market growth, up from an expected 33 percent in 2011 and just 13 percent in 2001, Aitken added.

Multinational companies are already focusing more and more on the new opportunity, but the results have been mixed.

"There is a wide level of variability but, by and large, the large multinational companies are already enjoying rapid growth from these markets," he said.

Some companies like Sanofi-Aventis and Bayer are now seeing 30 to 35 percent of their total sales growth coming from emerging markets, with Novartis at around 21 percent, he said. Others, such as Amgen and Takeda, have no significant presence yet.

Weak patent protection remains an issue in many places, however, and multinationals also face competition from some powerful local manufacturers in large markets like China and India.

The global pharmaceutical market is set to grow by 5-6 percent this year to $735-745 billion, according to previously published IMS forecasts.
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