Chronic Disease Rises Sharply in China
ChinaBio® Daily Update
Fully 25% of China's adult population suffer from hypertension and almost 10% have diabetes. The analysis was part of a ten-year study conducted by China's National Health and Family Planning Commission. Chronic diseases result from poor dietary habits, sedentary life styles and smoking, the report continued, though longer average lifespans also have an effect. The government plans an all-out education offensive to prevent the occurrence of chronic disease, and it pledged to develop best-practice use of western-style drugs and TCM products to treat chronic disease, once it occurs.
To encourage innovative drug development, China's State Council recently announced rules for a Marketing Authorization Holder pilot program: drug R&D institutions and individuals will now be able to apply for and hold CFDA approvals without having an in-house manufacturing capability. Previously this was not possible. Without incurring the expense of building a manufacturing operation, drug R&D companies and institutions can develop drugs, engage a contract manufacturer, apply for approval and market the drugs
The CFDA has issued new policies to reduce the very long waiting times for approvals -- both for clinical trial and marketing approvals. According to a recent Ropes & Gray internet posting, the new rules: 1) expand the categories of new drugs that qualify for fast-track approval; 2) simplify the clinical trial approval procedure; 3) allow innovative companies to file for approval without owning their own drug manufacturing facility; and 4) classify drugs that are approved outside of China as generics for China approval
Over the next five years, China's spending on medicines will grow at a 6-9% CAGR, with a total drug spend of $150-$180 billion in 2020, according to a forecast released by healthcare consultancy IMS. Just one year ago, IMS predicted that China's drug market would grow at a 10-13% CAGR over the same time period. China's expected economic slowdown is part of the reason for the revision, but IMS also thinks that, as more of China's citizens gain access to medicines, there is a smaller driver for future growth.
By Tracy Staton
Margins, margins, margins. That's an inevitable mantra among top investors and analysts. Just ask Novartis ($NVS) CEO Joe Jimenez, who's pledged big improvements in the Swiss drugmaker's spread. Or Eli Lilly ($LLY) CFO Derica Rice, who's had to explain why his company can promise to maintain margins as its sales spiral downward.
But if you want to talk to CEOs whose drug companies top the ranks of profit-generators, you'll have to go much smaller. As Investor's Business Daily reports, Jazz Pharmaceuticals ($JAZZ) boasts one of the best margins out there--and not just among drug companies. Jazz rode its controversial narcolepsy drug Xyrem to a 54.4% annual margin, IBD says. Not to mention a 40% hike in Q2 sales to $291.2 million.
Celgene ($CELG), the blood cancer specialist that's been growing by the billions, has been kicking plenty of that top-line growth to the bottom line, too. The company boasts an annual profit margin of 47.4%, thanks to leaping sales of its multiple myeloma treatment Revlimid. And CEO Bob Hugin has promised to double sales to $12 billion by 2017, so he's clearly confident that Revlimid, plus its newly approved myeloma treatment Kyprolis, will keep delivering.
Meanwhile, the often-spotlit Regeneron Pharmaceuticals ($REGN) racked up a 44.4% margin, with more than $1 billion in 2013 revenue and a money-churning eye drug, Eylea. Its Q2 numbers were impressive, too, with a 45% increase in sales to $665.7 million.
Alexion Pharmaceuticals ($ALXN) comes in for a margin award, too. IBD calculates a 42.9% annual margin for the rare disease specialist, thanks to the continued strong growth of its ultra-pricey drug Soliris. For Q2, IBD points out, the company delivered more than a half-billion dollars in sales, a year-over-year increase of more than one-third.
Funny thing about delivering margins. It appears to deliver some hefty pay packages, too. Three of these four companies have CEOs that hit FiercePharma's highest-paid list this year--two at the very top: Regeneron's CEO, Len Schleifer; Celgene's Hugin; and Alexion chief Leonard Bell.
Capturing Pharma Opportunities in Emerging Markets till 2017 from GIA :
Pharmaceutical & healthcare companies will continue to focus on BRIC countries for 2012 - 2017
US pharmaceutical & healthcare companies have a wide range of definitions for Emerging markets including product penetration, penetration level of the company and stage of economic development
China is the easiest to do business in and Brazil is becoming more competitive in the global context
Russia has less widespread appeal
Le marché de la pharmacie devrait croître de 4 % par an d'ici à 2015
Bien que la demande du marché soit structurellement en croissance grâce aux pays émergents, la rentabilité des grands laboratoires va se dégrader alors que la progression ralentie dans les pays développés anticipe une étude d'Euler Hermes.(30/03/12). Sur la période 2010-2015, le marché pharmaceutique mondial va continuer de croître, porté par une demande « structurellement en croissance », mais la rentabilité des grands laboratoires va se dégrader, anticipe une étude d'Euler Hermes, qui prévoit un taux annuel moyen du marché de 4 %. En valeur, ce marché pèsera 1.048 milliards de dollars (près de 789 milliards d'euros) en 2015, contre 880 milliards de dollars en 2011.
La progression du marché est tirée par les pays émergents où la croissance annuelle est attendue entre 10% (Amérique latine) et 17 % (Asie et Afrique) alors que la courbe est nettement plus plate pour les pays développés : de 0,4 % en Europe de l'Ouest à 1,4 % aux ÉtatsUnis.
Malgré une croissance de la demande bien supérieure, « le marché pharmaceutique des zones émergentes mettra davantage de temps à pouvoir jouer le rôle de relais de croissance » en raison d'un différentiel de pouvoir d'achat « considérable » avec les pays développés, poursuit M Livinec.
Résultat : 2012-2013 sera « une période délicate à gérer pour les grands laboratoires qui, clairement, afficheront des baisses de rentabilité (...) importantes », a déclaré jeudi Marc Livinec, analyste sectoriel d'Euler Hermes, en présentant l'étude. Cette année, le taux moyen de marge opérationnelle des grands laboratoires sera de 20,5 % du chiffre d'affaires, soit une chute de 4 points depuis 2006.
Prime aux Big pharmas européens en 2012
Autre explication de l'érosion « progressive, mais forte » de la rentabilité des grands laboratoires sur longue période : le basculement de la demande vers les génériques avec l'expiration de brevets majeurs, ainsi que vers les zones émergentes. Or_ les prix des médicaments génériques sont inférieurs à ceux des médicaments brevetés, dans une fourchette qui va de 15 % au Royaume-Uni à 73 % aux États-Unis. En France, l'écart est de 30 %, selon Euler Hermes, estimait Datamonitor dans une étude publiée récemment, alors qu'il n'était que de 243 millions en 2010. Cette forte croissance résultera de l'arrivée à échéance des brevets protégeant une trentaine de produits dont les ventes aujourd'hui atteignent 51 milliards de dollars. . Dès le 7 mai, les fabricants de produits génériques pourront ainsi, entre autres, copier légalement l'anticholestérol Tahor (Lipitor aux États-Unis), best-seller de la pharmacie française et mondiale.
Dans ce contexte, les « big pharmas » européens résisteront mieux que leurs homologues américains « alors que jusque-là c'était l'inverse », souligne M.Livinec. Les groupes américains sont en effet plus exposés à la concurrence des médicaments génériques et aux coûts de restructuration. En 2012, les grands laboratoires européens afficheront une rentabilité supérieure de 5 points à celle de leurs homologues américains : 18 % de taux de marge prévus aux États-Unis contre 22,5 % en Europe, prévoit l'étude (voir la présentation de cette étude).
Top 5 deals in 1H14
If the Novartis-GSK transaction is not surprising the Bayer-Merck & Co is amazing...
A new era in big pharmas strategies and profiles
To follow up
In-depth change in the pharmaceuticals arena : there is a definite room for innovation to promote drugs and deliver information :
Posted March 21, 2012
Survey of U.S. and E.U. Pharmaceutical Executives Reveals Widespread View That "the Business Model Is Broken"
Most companies plan to fix the problem by increasing marketing spending and redeploying resources in new ways
New York, NY; Philadelphia, PA – March 21, 2012: Confirming pessimism about the state of the pharmaceutical industry, a recent survey of U.S.- and E.U.-based pharmaceutical sales and marketing executives reveals that 68 percent believe "the current business model is broken." The survey, conducted jointly by Strategy & Brand formerly Booz & Company and National Analysts Worldwide, was designed to take the temperature of the industry on current challenges and help analysts understand how industry leaders plan to overcome those challenges in the next several years. It builds on surveys Booz & Company has conducted of E.U. pharma executives over the past several years.
"Those of us who work with pharma companies to develop and implement commercialization strategies know very well the challenges of maximizing asset value in this new environment, where both key customers and customer expectations are being redefined," observes Susan McDonald, CEO of National Analysts Worldwide and leader of the firm's healthcare practice. "We're not surprised to hear people acknowledge that they can't count on doing 'business as usual' and that they're looking for new ways to gain traction."
The greatest challenges identified by survey respondents are the growing healthcare system price/budget pressures and an increasing need to demonstrate cost-effectiveness and outcomes. In response to these challenges, more than half of the respondents expect to invest more heavily in marketing to key provider accounts and payors. Among the strategies seen as most important are new approaches to pricing, new service models, and new collaborations with payors.
Those convinced that the model is broken are reacting by making significant changes in how they spend marketing dollars and time. They are shifting their spending dramatically from community physicians to new stakeholders. In particular, they are disproportionately investing in key accounts, payors, and hospital stakeholders. By contrast, those who are not convinced the model is broken are making few adjustments to their spending.
"The pharmaceutical industry is the eye of a hurricane of change. The sales and marketing model is being forced to move to one that is much more complex. And this is happening in
an uncertain market with incredible pressure to reduce budgets. The only clear path out of the storm is for companies to identify and focus on building the few critical capabilities they will
need to succeed," says Danielle Rollmann, a partner in Booz & Company's global health practice.
The survey provides insights into the capabilities and strategies that will be most important moving forward, including:
• Organizing sales and marketing activities around diverse stakeholders, especially hospitals and insurers
• Taking a more creative approach to customer collaboration, including new pricing strategies, innovative service models, and novel partnerships
• Doing a more effective job of demonstrating value through outcomes
• Continuing to emphasize direct-to-consumer (DTC) marketing, in recognition that patients hold the other end of the purse strings
• More effectively using innovative digital media channels
"Virtually everything is changing in the model and the market. In response, most respondents say they plan to spend more on all their target marketing activities. Yet this is not aligned with what pharma is doing and needs to do at a company level. The companies that focus, prioritize, and follow a coherent strategy will be the winners," says Rolf Fricker, a Munich-based partner at Booz & Company.
As noted above, the survey also signals plans to do more direct-to-consumer marketing. "This is one of many areas where we are helping pharmaceutical companies think differently. The power base in the industry is fundamentally shifting toward insurance companies, integrated providers, and patients. Influencing a sale is getting increasingly complicated and requires more innovative approaches to reach multiple audiences, so expect to see more innovative digital and social media in this space," says David Levy, a partner at Booz & Company serving clients in the life sciences.
The survey, which was completed in late fall 2011, is based on a sample of 156 sales and marketing leaders, most with global responsibilities, at pharmaceutical companies in the U.S. and E.U. Survey participants were primarily vice presidents and directors. For a link to the key findings of the survey, visit: http://www.strategyand.pwc.com
Read more: Survey of U.S. and E.U. Pharmaceutical Executives Reveals Widespread View That "the Business Model Is Broken" - FiercePharma http://www.fiercepharma.com/press_releases/survey-us-and-eu-pharmaceutical-executives-reveals-widespread-view-business?utm_medium=nl&utm_source=internal#ixzz1pptMasqI
Datamonitor March 2011
Prescription pharmaceutical sales in the world's major markets (Australia, Brazil, China, France, Germany,India, Italy, Japan, Russia, Spain, the UK and US) totaled $555bn in 2009, having grown by 6.3% during 2008-09, and at a compound annual growth rate (CAGR) of 5.6% between 2005 and 2009.
Going forward, however, the historic expansion will be replaced by a more challenging future, as reflected in the forecast sales CAGR of 1.1% over 2010-15, with flat annual growth. Consequently, this will prompt the pharmaceutical industry to seek more profitable avenues, as exemplified by the continued uptake of high value biologic therapies as well as the ongoing expansion in the rapidly-growing emerging markets.
IMS Health forecast: Global pharmaceutical market poised for growth in 2011 to $880 billion
Monday, October 25, 2010 09:02 AM
Robust pharmaceutical spending in 17 emerging countries led by China, and those governments making more treatment options available to their citizens, will offset patent losses and slow growth in the United States pharmaceutical market, according to a forecast by IMS Health.
IMS, an industry data company, expects the global drug market to grow 5% to 7% in 2011 to $880 billion. Drug sales for 2010 are expected to rise 4% to 5%.
Next year’s outlook is based, in part, on China’s anticipated strong growth—25% to 27% to $50 billion—making it the world’s third largest market for prescription drugs, according to IMS projections.
The United States, far and away the leader in pharmaceutical sales, is expected to reach $320 billion to $330 billion in 2011, up about 4% from the $310 billion forecast for this year, not including the impact of off-invoice discounts or rebates. Prescription sales in Canada and in Europe’s five largest markets—Germany, France, Italy, Spain and the United Kingdom—will inch up 1% to 3% next year, according to the IMS forecast.
The lower growth in Europe and the U.S. is also due to insurers and government health programs wanting to hold down spending on prescription drugs. Strategies include greater pre-authorizations for more medications, higher copayments and a reduction in reimbursement levels in some European countries.
“In 2011, we will see the loss of exclusivity for some iconic brands and a promising new wave of innovation,” said Murray Aitken, IMS senior vice president. “It also will be a critical year for gauging how healthcare reform initiatives in key markets evolve and play out amid the expected macro-economic recovery.”
Next year will mark the introduction and uptake of new drugs including innovative treatment options for stroke prevention, melanoma, breast cancer and hepatitis C, and the first oral medication to treat multiple sclerosis. IMS estimates five potential blockbuster drugs—each with more than $1 billion in annual peak sales—are expected to be approved and launched globally by the end of 2011.
On the down side, patents for drugs with sales of more than $30 billion will expire in 2011, including four medications that accounted for more than 93 million prescriptions dispensed in the past 12 months and $17 billion in total sales. They face low-cost, generic competition in the U.S. and other major markets.
“No doubt big pharma will look to emerging markets for opportunities to offset the loss of revenue to generic competition, but it won’t be easily done,” concluded the Burrill Report in its analysis of the IMS Health forecast. “The pricing pressures and generic competition that is new in developed markets is a fact of life in the emerging countries.”
Last update in France (source Celtipharm / Afipa)