The struggling economy will cost pharmaceutical companies $15 billion in lost sales this year, the research firm IMS Health Inc. said yesterday.
IMS revised its 2009 industry forecast, saying sales would grow only 2.5 percent to 3.5 percent, 2 percentage points lower than it had estimated in October.
That would be the smallest increase in 25 years, IMS said. Yesterday also marked the first time IMS had predicted shrinking prescription sales in the United States in the 52 years it has been tracking those numbers.
IMS said it expected U.S. drug sales to drop 1 percent to 2 percent in 2009, with growth remaining flat over the next five years.
IMS forecast that drug companies would tote up $750 billion in worldwide revenue this year. In October, it predicted $820 billion.
Currency fluctuations account for $55 billion of that difference and the faltering economy the rest.
"We see the worldwide financial crisis contributing to record low sales growth this year," said Murray Aitken, a senior vice president at IMS. "The pharmaceutical industry is not recession-proof, but it is insulated to a greater extent than other industries where spending is more discretionary."
Aitken said drug companies would need to refocus on emerging markets and do a better job of differentiating their products so insurance companies and other payers will view them as better than competitors', including generics.
"Our advice is to strengthen the evidence that exists around the value of the medicines to support pricing levels," he said.
IMS said it expected sales to rebound in 2010. But even then, patent expirations on key drugs and continued pressure to drive down health-care costs will weigh on industry profit. The company predicted that global pharmaceutical sales would grow at a compound rate of 3 percent to 6 percent through 2013.
The pressure on the pharmaceutical industry was apparent this week, when several companies reported first-quarter earnings. Yesterday, GlaxoSmithKline P.L.C. said its first-quarter net income fell 12 percent as U.S. sales shrank 22 percent in the face of generic competition.
As consumers begin to bear more of the burden of paying for drugs, some will choose not to start or to discontinue treatment, IMS said. IMS said it had begun to detect such patterns even with serious illnesses, such as diabetes.
Growth in what IMS calls the "pharmerging markets," China, Brazil, Mexico, Turkey, India, South Korea, and Russia will compensate somewhat for sluggish growth here. Those countries will contribute more than half of all sales growth this year and 40 percent of yearly growth through 2013, the company predicted. IMS said pharmaceutical sales in the emerging countries would increase 13 percent to 16 percent yearly through 2013.
IMS is based in Connecticut and has major operations in Plymouth Meeting.