Generics and biosimilars to drive down drug spending

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Generics and biosimilars to drive down drug spending

INICIO/Noticias Farmacéuticas | Posted 27/05/2011 0 Post your comment

A report published by IMS Health on 18 May 2011 predicts a slowing down of the growth in annual spending on medicines, with generics being one of the main contributing factors for this reduction.

IMS predicts global spending for medicines to reach nearly US$1.1 trillion by 2015, with a compound annual growth rate of 3-6 percent over the next five years. This compares with 6.2 percent annual growth over the past five years.

Brand name medicines
Spending on brand name medicines will be hit hard by the impact of patent expiries, and in developed markets will remain the same in 2015 as in 2010. Globally, the market share for brand name medicines, which fell from 70% in 2005 to 64% in 2010, is expected to decline further to 53% by 2015. This, although driven by generic erosion, is also a consequence of the limited pipeline of new products.

Generics
Due to expiring patents for brand name medicines cheaper generics are expected to grab market share—in turn providing US$98 billion in net savings to developed countries by 2015. This is almost double the savings from use of generics in the five years to 2010. This is not surprising due to the list of blockbuster drugs losing their patent protection in 2011 and 2012. These include the number one best-selling drug, Lipitor (atorvastatin), which in 2010 had US$10.8 billion in worldwide sales, accounting for 15.8% of Pfizer’s total revenue [1].

Other areas of expansion for generics are in emerging markets, where 80 cents of every dollar spent on medicines in 2015 is expected to be for generics.

Biosimilars
By 2015, IMS expects spending on biosimilars to exceed US$2 billion annually, or about 1% of total global spending on biologicals. They expect new biosimilars to enter the US market by 2014 and European markets to have additional biosimilar molecules introduced during this period. This is expected to increase spending on biosimilars to over US$311 million.

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Reference

1. GaBI Online - Generics and Biosimilars Initiative. 2011’s biggest patent expiries [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International. Available from: www.gabionline.net/Policies-Legislation/2011-s-biggest-patent-expiries

Source: IMS Health