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BW Businessworld

Return To Growth Mode

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Global research firm ims health, which predicted in April that the global pharma market would shrink in 2009 — for the first time in 25 years — has revised its forecasts, predicting a better outlook for the sector.

IMS now expects global drug sales to grow by 4-6 per cent (on a constant-dollar basis) in 2010 to over $825 billion, driven by stronger near-term growth in the US market. Just six months ago, IMS Health had forecast that drug sales in the US in 2009 would decline by 1-2 per cent. Now, it sees growth of 4.5-5.5 per cent this year, and 3-5 per cent in 2010.

According to the company, higher than anticipated demand caught pharmacies off guard, forcing them to rebuild inventories slashed late last year. Meanwhile, drug makers were able to implement price increases despite the struggling economy, leading to the improved forecast.

However, growth over the next five years is expected to be anaemic. IMS Health predicts global pharmaceutical sales will grow at a 4-7 per cent compound annual growth rate through 2013, raising its estimates by 1 per cent. Considering the projected market size of $975 billion, 1  per cent is not negligible, and that's good news for India's drug makers. However, if the industry wants to get back to double-digit growth, it will still need to increase its presence in fast-growing emerging markets, diversify into new businesses and step up its R&D efforts.

(This story was published in Businessworld Issue Dated 26-10-2009)


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magazine healthcare noemie bisserbe pharma ims