Bigfarma-2009: fortune-telling on coffee grounds
Big Pharma 2009: Is there a place for optimism?"Weekly PHARMACY" No. 3-2009
The life of business analysts has ceased to be routine – the last six months have made serious changes in their work, especially with regard to forecasting the upcoming economic situation. Today, only the most risky experts undertake to make long–term forecasts, or those who, like betting on a sweepstake, are trying to play "pan or gone" - this is an attempt to make a name for themselves by taking advantage of a crisis situation. If the forecast is justified, then it can be argued that everything was calculated with great accuracy, and if it is not justified, then everyone will forget about such a failure anyway. It is such "experts" who, in an attempt to get their finger in the sky, take the side of one of the marginal predictions, either extremely positive or extremely negative, while claiming that events will happen in full accordance with it. In other cases, we are talking, rather, about the proposed scenarios for the development of the situation, options that may develop under the influence of key factors. Such more cautious and balanced attempts to look into the situation have a certain methodology, rely on research data, and use a scientific approach. This situation is also observed in the field of bigfarma development forecasts – scenarios are assumed that, like day and night, are opposed to each other, and it has become as difficult to predict for a month ahead as it is to predict which house will be destroyed by the coming tornado, and which one will only be swept away by dust and dirt and it will only look more beautiful after the violence of the elements.
What do experts promise the world of big pharma in the coming years? Let's turn to several authoritative forecasts. Among them are the forecast "IMS Global Pharmaceutical and Therapy Forecast" presented by "IMS Health", the forecast of the development of the global pharmaceutical market until 2012 from the company "RNCOS", scenarios reviewed on the pages of the magazine "Scrip", as well as a number of other sources presented on the Internet.
"In many ways, 2009 It will reflect the new form of existence of the global pharmaceutical market, which is the result of market factors that have gained strength over the past few years," said Murray Aitken, Senior Vice President of IMS Health. Almost all experts agree on the definition of these factors.
The global pharmaceutical market will continue to growAlmost all experts prefer to be optimistic.
The global pharmaceutical market, according to IMS Health forecasts, will grow by 4.5–5.5% in 2009, similar to the growth rates of 2008, and global sales of pharmaceutical products will exceed 820 billion US dollars. Growth is also predicted by RNCOS, which believes that there will be an increase in global sales of about 8% in the period up to 2012 (which somewhat blurs the accuracy of the forecast – there may be ups and downs in the three-year period, the average result of which may not characterize the situation as a whole).
Slowing growth in mature markets in favor of emerging marketsThis trend has already clearly manifested itself in recent years.
One of the world's largest pharmaceutical markets, the United States, is a prime example. At the beginning of 2008, it was predicted that sales volumes in this market would increase by 3-4%, but at the end of the year, experts' opinions on this matter became less optimistic – today they say that the growth was only 1-2%, but everyone is waiting with bated breath for real reports on the results of the year.
The reason for this is the economic crisis, the scale of which is still impossible to assess today. Changes in the situation on the stock markets have significantly affected the economic climate in one of the strongest powers in the world. Experts are sounding the alarm – the real threat to the country's economy was that many large corporations in previous years shifted the focus from the production of real values to securities speculation, which brought faster and easier money. The first signal that inflated financial bubbles are beginning to burst was the bankruptcy of the American bank Lehman Brothers. Then it became obvious that not only stockbrokers and banks would be hit, but games with securities could end badly for large corporations, as for such giants as Boeing and General Motors (automotive giants were among the first to suffer from the crisis), and even manufacturers of high–tech intelligent products such as like "IBM". You may ask, what does this have to do with big pharma? The most direct. A striking example occurred in In the Old World, the first major victim of the crisis, billionaire Adolf Merkle, whose suicide is associated with the financial crisis. A. Merkle owned a diversified business – the holding company "VEM Vermoegensverwaltung" owned by him was engaged, among other things, in the sale of medicines. Last year, A. Merkle's fortune was estimated at $ 9.2 billion. The businessman owned Germany's largest drug wholesale company, as well as shares in a large generic manufacturer, Ratiopharm International GmbH. With the fall of stock markets, A. Merkle's fortune began to rapidly melt; moreover, he found himself at a major loss due to investments in Volkswagen AG shares, the price of which speculatively soared at the time of their purchase by Porsche. The sad ending of this story is known. A positive fact is that in the pharmaceutical business, companies turned out to be less tied to securities speculation, and were engaged in the production of real values necessary for humanity – medicines.
However, the risk for the market is not only in the fall of stock markets. The change in the economic climate significantly affects the well–being of people - the unemployment rate and personal bankruptcies are increasing, the incomes of the population are falling, social benefits are decreasing. All this will inevitably affect patients' visits to both doctors, whose services are very expensive in the United States, and pharmacies. California can serve as a barometer not only of geographical, but also of economic weather. In the December report of the State Auditor (State Controller's) John Chang (John Chiang) was informed that in November 2008 the most pessimistic estimates were surpassed. Budget revenues fell by $1.3 billion. According to the estimates of November 2008 the state budgets were supposed to be exhausted in March 2009, but the data obtained suggest that the state may run out of money in February. It is not difficult to draw conclusions about how much this state of affairs can affect the well-being of people and the volume of sales of drugs.
But even according to optimistic forecasts, a slowdown in sales growth in mature markets will inevitably occur, at the same time, in emerging markets, almost all experts expect a further increase in sales volumes.
North America will remain the largest regional pharmaceutical market in the world (in 2007 it accounted for 42.8% of global pharmaceutical sales), however, the development of the region will slow down due to the fact that sales of cheaper generics are rapidly increasing. In Latin American markets, stable growth is expected in Brazil and Mexico, which are among the fastest growing pharmaceutical markets in the world.
In Europe, sluggish growth is expected in the leading markets (France, Germany, Italy, Spain and the UK) in the next 5 years. The situation will be determined by global economic factors, but the continued aging of the region's population and the growing demand for preventive services will have a positive impact on sales volumes. Emerging markets in Central and Eastern Europe is projected to show growth in the same period.
Japan, one of the world's largest pharmaceutical markets, is expected to continue to increase turnover by 4-5% in 2009. The approval of new antitumor drugs, state disease prevention programs, and a two-year ban on drug price increases will contribute to increased growth. The government's efforts to encourage the use of generics will have only a minor impact on the Japanese market in 2009.
The share of China, India and South Korea in the global pharmaceutical market will increase. In general, the huge population and strong economic growth in the leading countries of the Asian region, according to forecasts, will lead it to the most profitable pharmaceutical markets in the future. The strengthening of the pharmaceutical markets of Russia and Turkey is also predicted.
Growth in the prescription drugs segmentAs expected, for prescription drugs in 2009
there will be an increase in sales volumes by 8-9%, which will contribute more than 60% to the overall growth in sales of pharmaceutical products. Thus, according to forecasts, the volume of sales of oncological group products will increase by 15-16%, drugs for HIV therapy – by 13-14%. For the over-the-counter group, the corresponding indicator will be only 2-3%, which is largely due to the increasing prevalence of generics.
This correlates with the data of pessimistic forecasts – with a decrease in household incomes as a result of the economic downturn, consumption of over-the-counter drugs will obviously decrease, at the same time, sales of vital medicines will not decrease so dramatically.
The balance of power in bigfarm may changeOne of the decisive factors influencing the balance of power among the world's top companies is that the development and approval of new active substances, drugs with which have never received marketing permission, have reached unprecedented low levels.
Only 25-30 of these new active substances will be put on the market in 2009. At the same time, most of them have very limited potential, since they are niche highly specialized products. Only a few drugs for the treatment of acute coronary syndrome, diabetes, rheumatoid arthritis and meningitis are predicted to have a great future. In addition, a number of pharmaceutical blockbusters will lose patent protection in the coming years, generic companies are already fully prepared to win back their positions in the market at the expense of their cheaper counterparts.
The image of pharmaceutical leaders looms quite accurately: these are companies that have promising recently approved drugs in their portfolio, which becomes a strong engine in their business. Outsiders may be those who lose patent protection for leading drugs, and these companies risk undergoing a significant decrease in sales volumes.
For the pharmaceutical market as a whole, this situation will have a negative impact on sales volumes in monetary terms, at the same time, the number of packages sold may grow significantly.
It's all right, beautiful Marchioness…Experts are optimistic.
Forecasts for the development of the global pharmaceutical market look very good against the background of the fact that analysts are sounding the alarm in many other sectors of economic activity. The concentration of negative forecasts has grown disproportionately positive, to the point that world-renowned experts, including Nobel laureates, politicians and leading economists, warn of a serious risk of collapse of economic and banking systems, hyperinflation of key currencies, rising unemployment around the world and other misfortunes that await humanity if proper measures are not taken. Today it is already obvious that the word "globalization" is no longer an abstract term, but describes the current situation in the world when one country can influence the economy on a global scale. We will be able to assess the further development of events and the abilities of modern predictors in the near future, and the Weekly PHARMACY only promises that with our help you will be among the first to learn about everything that is happening!
Portal "Eternal youth" www.vechnayamolodost.ru19.01.2009