Pharmaceutical industry growth depends heavily on emerging markets abroad, a health care expert told gatherers today at Rutgers Business School, in Newark.
Seyed Mortazavi, president of IMS Health's U.S. operations, an information provider for the health care industry, said the so-called "pharm-merging" markets, largely China and India, will drive medicine spending increases as more people enter the middle class.
By 2016, Mortazavi said, the emerging markets are projected to consume about 30 percent of the world's market share for medicine, the same amount as the United States.
"The industry is in the midst of a remarkable evolution," Mortazavi said.
The industry's annual projected growth ranges from 3 percent to 6 percent between now and 2016, when total sales are predicted to reach $1.1 trillion, according to IMS. U.S. growth is projected at between 0 percent and 3 percent during that time, compared with as much as 14 percent for the "pharm-merging" markets.
Mortazavi said growth projections reflect the end of the recession, wider availability of generics and improved access to health care in the United States through the Affordable Care Act.
U.S. market growth actually dipped 1 percent in 2012, a trend Mortazavi said was driven by patent expirations. IMS says the coming years will see growth in unbranded generics, which will make up 87 percent of prescriptions by 2017, compared with 84 percent now.
Mortazavi said approval of blockbuster drugs has dramatically declined in recent years compared with the soaring levels of the late 1990s.
"The challenge we see lying ahead is that pharmaceutical companies will have to launch multiple drugs in shorter time periods," as opposed to relying heavily on a few blockbusters, Mortazavi said. "Launch and launch effectiveness is the most important thing."
The Rutgers school organized the forum to address trends facing the biopharmaceutical industry. More than 100 people gathered at the symposium, which will feature speakers and panels through the afternoon.
New Jersey employs about 52,000 people in the life science industry, contributing about $24 billion to the state's economy, said John Casetellani, president of Pharmaceutical Research and Manufacturers of America, a Washington, D.C.-based trade group.
Castellani said the industry's future required more innovative medicines and preventative therapies, something he argues will require a better consensus among policymakers, regulators and the private sector than currently exists.
Doing so will reduce costs in the long term, he said. Castellani said treating an expensive malady such as diabetes costs $2,400 a year, but an amputation costs an average $40,000, while a single year of dialysis to treat kidney failure costs $83,000.
"It is unquestionably better to treat and control diabetes than it is to amputate" or perform dialysis, Castellani said.