Abstract
BMI expects the US pharmaceutical market to contract with a compound annual
growth rate (CAGR) of
-0.35% during 2008 and 2013 to reach a valuation of
US$302bn. Generic drugs will experience an
increase in sales as the
government tackles both the healthcare reform and its drug procurement
policy
with a more positive stance on off-patent pharmaceuticals. We
attribute this contraction to the onset of the
patent cliff in 2011 and
the wide scale introduction of comparatively cheaper generic drugs. The
contraction is small as we believe that the healthcare reform will allow wider
access to medical services
due to mandatory insurance cover.
The US
FDA looks set to receive a financial boost from late 2009, following a
proposal from President
Barack Obama for a 19% increase in the
regulator’s budget for FY10, which begins October 1 2009. If
approved the annual budget would rise to US$3.2bn. As part of the proposal,
generic drugmakers would
also be charged user fees. BMI would welcome
congressional approval of the hike, which would result in
a probable
increase in efficiencies and a reduction in approval delays for drug
manufacturers.
Drugmakers in the US decreased their direct-to-consumer
(DTC) pharmaceutical advertising budgets
from US$4.8bn in 2007 to US$4.4bn
in 2008, equating to a 9% decline in expenditure. This is line with
one of
BMI’s core views for the pharmaceutical and healthcare industry:
branding will become more
important, but spending on advertising will
decrease.
BMI believes that the savings realised from generic competition
highlight that the current generics
system is working efficiently in
lowering costs, rather than needing significant reform. However, we note
that creating an approval mechanism for biosimilars in the US – the
focus of BMI’s recently published
special report, Biosimilars:Obama
Unfolds New Opportunities – is a key challenge for the
administration
and, if successful, could lead to significant opportunities
for both research-based and generic drugmakers.
Over-the-counter (OTC)
analgesics will be required to carry additional safety warnings after the
US
FDA’s Office for Nonprescription Drugs in the Center for Drug
Evaluation and Research highlighted the
importance of consumers being
fully aware of potential side-effects. The ruling will mean that by April
2010 manufacturers must ensure active ingredients are conspicuous on packaging
and that labelling warns
about the risks of stomach bleeding – for
non-steroidal anti-inflammatory drugs (NSAIDs) – and of
severe liver
damage for acetaminophen.
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