An Aging Market Advances Drug Sales

Growth of global prescription drug sales slowed last year to its lowest rate since 1998, new data showed Wednesday.

But, in rising at a 7 percent clip, drug sales still reached $550 billion – nearly double seven years ago.

"We’re seeing the impact of cost-containment measures definitely constraining growth in significant markets," said Murray Aitken, senior vice president of corporate strategy for IMS Health, the Fairfield, Conn.-based pharmaceutical information company that compiled the data. "We’re also seeing the impact of new products launched over the last two to three years which were not as strong as [launches] in the late 1990s. At the same time, we’re still seeing pockets of significant growth."

Demographics – namely, the growing aging population – continue to provide a favorable climate for the drug industry.

North America, Europe and Japan accounted for 88 percent of global sales in 2004, the same level as the year before. Pressures to control costs moderated increases.

Growth boomed in China, however, where sales rose 28 percent to $9.8 billion. Aitken said the rapid economic growth in China is allowing the government to improve access to medications, while patients are also demanding more. Meanwhile, multinational pharmaceutical houses are moving aggressively into the market, he said.

In 2004, 82 drugs surpassed the $1 billion, "blockbuster" level, 17 more than in 2003.

Cholesterol-lowering drugs – which include the world’s biggest seller, Lipitor – remained the top-selling category of medicines, with $30 billion in sales. Anti-ulcer drugs ranked second, followed by cancer therapies, which grew 17 percent last year.

Overall, IMS projects annual growth of 6 percent to 9 percent a year over the next five years, Aitken said, as favorable demographics and the introduction of new products weigh against persistent efforts to cut spending.

One wild card, Aitken said, is how regulatory bodies respond to recent safety controversy. Questions about antidepressants last year were followed by the withdrawal of Vioxx and wider concerns over heart risks with that class of painkillers. With a fresh round of worries last month, when the makers of Tysabri suspended marketing of the multiple sclerosis drug, regulators could apply stricter standards to new medicines and to already marketed drugs that would ripple through the industry.

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Prescription marketplace

Name / Condition/purpose / Manufacturer / 2004 global sales

Lipitor / High cholesterol / Pfizer / $12B (up 13.8%)

Zocor / High cholesterol / Merck / $5.9B (down 6.4%)

Plavix / Anti-clotting / Bristol-Myers Squibb/Sanolfi-Aventis / $5B (up 31.4%)

Nexium / Heartburn/acid reflux / AstraZeneca / $4.8B (up 25.3%)

Zyprexa / Schizophrenia / Eli Lilly / $4.8B (down 3.5%)

Norvasc / Hypertension / Pfizer / $4.8B (up 1.2%)

Advair / Asthma / GlaxoSmithKline / $4.7B (up 22.5%)

Procrit/Epogen / Anemia / J&J/Amgen / $4B (down 4.1%)

Prevacid / Heartburn/acid reflux / TAP/Takeda / $3.8B (down 3.5%)

Effexor / Depression / Wyeth / $3.7B (up 20.1%)

Source: IMS Health