Boston, MA -- (SBWIRE) -- 08/28/2012 -- BMI View: The US pharmaceutical market is entering a period of relative stagnation. Patent expiries, fewer insured patients and greater use of rebates and discounts are creating severe headwinds to growth. A major downside risk is reduced tolerance for medicine price increases from payers, both public and private. We stress, however, that the US pharmaceutical market is still the most attractive globally, due to its large size and rapid uptake of newly approved innovative, and therefore high-priced, medicines.
Headline Expenditure Projections
- Pharmaceuticals: US$337.1bn in 2011 to US$343.1bn in 2012; +1.8% growth in local currency terms. Market size increased since Q212 due to new historic data, resulting in an upgraded forecast.
- Healthcare: US$2,708bn in 2011 to US$2,864bn in 2011; +5.8% growth in local currency terms. Market size increased since Q212 due to new historic data, resulting in an upgraded forecast.
- Medical devices: US$133bn in 2010 to US$139bn in 2011; +4.4% growth in local currency terms. Forecast is up slightly from Q212 due to new historic data.
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Risk/Reward Rating: The US Pharmaceutical Risk/Reward Rating (RRR) for Q312 is 79.1 out of 100, which is unchanged from the previous quarter. The country scores well above average for all indicators, except market growth, which is in the low single-digits. Key attributes include transparent regulations, an ageing population and a stable economic/political framework.
Key Trends And Developments
- In May 2012, BMI switched its primary data provider for US OTC medicine sales from the Association of the European Self-Medication Industry (AESGP) to the Consumer Healthcare Products Association (CHPA), which provides more reliable numbers over a longer time frame.
- In May 2012, Swiss pharmaceuticals firm Novartis acquired US dermatology specialist Fougera. The acquisition reportedly cost Novartis US$1.525bn and will allow it to emerge as a global leader in the production of generic dermatology treatments.
- In April 2012, a ruling by the US Supreme Court allowed generic drug manufacturers to challenge attempts from pharmaceutical firms to extend the remit of existing patent descriptions. The ruling overrides a decision by the court of appeals in 2010. It follows Novo Nordisk's efforts to amend the phrasing of a patent covering its Prandin (repaglinide) drug.
- In April 2012, BMI revised upwards its forecast for the US pharmaceutical market, following the receipt of newly released historic data. We now expect combined sales of prescription drugs and over-the-counter medicines to increase from US$337bn in 2011 to US$343bn in 2012, equating to 1.8% growth.
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