The US pharmaceutical market is entering a period of relative stagnation. Patent expiries, fewer insured patients and greater use of rebates and discounts are creating severe headwinds to growth.
A major downside risk is reduced tolerance for medicine price increases from payers, both public and private. We stress, however, that the US pharmaceutical market is still the most attractive globally, due to its large size and rapid uptake of newly approved innovative, and therefore high-priced, medicines.

Headline Expenditure Projections
Pharmaceuticals: US$337.1bn in 2011 to US$343.1bn in 2012; +1.8% growth in local currency terms. Market size increased since Q212 due to new historic data, resulting in an upgraded forecast.
Healthcare: US$2,708bn in 2011 to US$2,864bn in 2011; +5.8% growth in local currency terms. Market size increased since Q212 due to new historic data, resulting in an upgraded forecast.
Medical devices: US$133bn in 2010 to US$139bn in 2011; +4.4% growth in local currency terms. Forecast is up slightly from Q212 due to new historic data.
Risk/Reward Rating: The US Pharmaceutical Risk/Reward Rating (RRR) for Q312 is 79.1 out of 100, which is unchanged from the previous quarter. The country scores well above average for all indicators, except market growth, which is in the low single-digits. Key attributes include transparent regulations, an ageing population and a stable economic/political framework.

Key Trends And Developments

• In May 2012, BMI switched its primary data provider for US OTC medicine sales from the Association of the European Self-Medication Industry (AESGP) to the Consumer Healthcare Products Association (CHPA), which provides more reliable numbers over a longer time frame.
• In May 2012, Swiss pharmaceuticals firm Novartis acquired US dermatology specialist Fougera. The acquisition reportedly cost Novartis US$1.525bn and will allow it to emerge as a global leader in the production of generic dermatology treatments.
• In April 2012, a ruling by the US Supreme Court allowed generic drug manufacturers to challenge attempts from pharmaceutical firms to extend the remit of existing patent descriptions. The ruling overrides a decision by the court of appeals in 2010. It follows Novo Nordisk’s efforts to amend the phrasing of a patent covering its Prandin (repaglinide) drug.
• In April 2012, BMI revised upwards its forecast for the US pharmaceutical market, following the receipt of newly released historic data. We now expect combined sales of prescription drugs and over-the-counter medicines to increase from US$337bn in 2011 to US$343bn in 2012, equating to 1.8% growth.

The US Food and Drug Administration (FDA) gained the authority to approve biosimilars as part of the Patient Protection and Affordable Care Act (PPAC Act) signed by President Barack Obama on March 23 2010, which is also referred to as the Biologics Price Competition and Innovation Act 2009 (BPCI Act).

BMI Economic View: With the bounce in US growth in the latter part of 2011 set to moderate as 2012 progresses, we are maintaining our 2012 real GDP growth forecast of 2.0%, followed by 2.4% in 2013.
The biggest risks come from abroad, with the European debt and economic crisis representing a constant threat to US economic stability.

BMI Political View: The November 2012 presidential and congressional elections are finely poised. The Republican Party is set to gain ground on the Democratic Party in the Senate, but the presidential race is much tougher to call. The outcome of the elections will be crucial in determining medium-term policy direction. But in the interim we expect continued policy paralysis.

United States Pharmaceuticals and Healthcare Industry

Published: July 2012                No. of Pages: 104             Price: US $ 1175       
                          


Table of Contents

Executive Summary ... 5
SWOT Analysis 7
US Pharmaceuticals And Healthcare Industry SWOT . 7
United States Political SWOT .. 8
United States Economic SWOT 8
United States Business Environment SWOT . 9
Pharmaceutical Risk/Reward Ratings . 10
Table: Americas Pharmaceutical Risk/Reward Ratings, Q312 10
Rewards ... 11
Risks ... 12
US – Market Summary . 13
Regulatory Regime .. 15
Innovative Drug Regulations . 16
Generic Drug Regulations . 18
Biosimilar Regulations . 20
OTC Medicine Regulations 22
Medical Device Regulations .. 23
Promotion Regulations 24
Intellectual Property Regulations 26
Pricing And Reimbursement Environment . 27
Part D 29
Industry Developments . 30
Epidemiology . 30
Healthcare Sector .. 31
Research & Development Sector 32
Clinical Trials 33
Contract/Clinical Research Organisations 34
Medical Device Industry .. 35
Industry Forecast Scenario .. 36
Pharmaceutical Market Forecast . 36
Table: Pharmaceutical Sales Indicators 2008-2016 38
Key Growth Factors – Industry .. 39
Table: Healthcare Expenditure Indicators 2008-2016 .. 41
Table: Healthcare Governmental Indicators 2008-2016... 41
Table: Healthcare Private Indicators 2008-2016 42
Key Growth Factors – Macroeconomic . 43
Table: US GDP By Expenditure, Real Growth, 2008-2016 . 54
Prescription Drug Market Forecast . 55
Table: Prescription Drug Sales Indicators 2008-2016 .. 56
Table: Top 10 Therapeutic Classes By Sales (US$bn) ... 57
Table: Top 10 Therapeutic Classes By Dispensed Prescriptions (mn) ... 57
Patented Drug Market Forecast 58
Table: Patented Drug Market Indicators 2008-2016 . 59
Generic Drug Market Forecast .. 60
Table: Generic Drug Sales Indicators 2008-2016 ... 61
OTC Medicine Market Forecast 62
Table: OTC Medicine Sales Indicators 2008-2016 .. 63
Medical Device Market Forecast . 64
Table: Medical DevicesSales Indicators 2008-2016 65
Pharmaceutical Trade Forecast . 66
Table: Exports And Imports Indicators 2008-2016 .. 68
Key Risks To BMI’s Forecast Scenario 69
Competitive Landscape 70
Research-Based Industry . 70
Table: Top 10 Companies By US Prescription Sales (US$bn) . 71
Table: Top 10 Drugs By US Sales (US$bn) ... 71
Research-Based Industry – Key Developments 72
Generic Drugmakers 72
Table: Top 10 Companies By US Dispensed Prescriptions (mn) . 73
Drug Distribution Sector . 73
Pharmacy Retail Sector ... 75
Table: US Dispensed Prescription Drug Distribution By Channel Distribution Volume (mn) ... 76
Company Profiles 77
US Companies... 77
Pfizer.. 77
Merck & Co . 81
Eli Lilly 84
Amgen 86
Watson Pharmaceuticals .. 88
Foreign Companies . 90
GlaxoSmithKline 90
AstraZeneca . 92
Demographic Outlook . 94
Table: Population By Age Group, 1990-2020 (‘000) . 95
Table: Population By Age Group, 1990-2020 (% of total) . 96
Table: Key Population Ratios, 1990-2020 . 97
Table: Rural And Urban Population, 1990-2020 . 97
Glossary ... 98
BMI Methodology ... 100
How We Generate Our Pharmaceutical Industry Forecasts .. 100
Pharmaceuticals Business Environment Ratings ... 101
Risk/Reward Ratings Methodology 101
Ratings Overview . 101
Table: Pharmaceutical Business Environment Indicators 102
Weighting ... 103
Table: Weighting Of Components .. 103
Sources .. 103Table: Americas Pharmaceutical Risk/Reward Ratings, Q312 . 10
Table: Pharmaceutical Sales Indicators 2008-2016 . 38
Table: Healthcare Expenditure Indicators 2008-2016 . 41
Table: Healthcare Governmental Indicators 2008-2016. 41
Table: Healthcare Private Indicators 2008-2016 . 42
Table: US GDP By Expenditure, Real Growth, 2008-2016 . 54
Table: Prescription Drug Sales Indicators 2008-2016 . 56
Table: Top 10 Therapeutic Classes By Sales (US$bn) . 57
Table: Top 10 Therapeutic Classes By Dispensed Prescriptions (mn) . 57
Table: Patented Drug Market Indicators 2008-2016 . 59
Table: Generic Drug Sales Indicators 2008-2016 . 61
Table: OTC Medicine Sales Indicators 2008-2016 . 63
Table: Medical DevicesSales Indicators 2008-2016 . 65
Table: Exports And Imports Indicators 2008-2016 . 68
Table: Top 10 Companies By US Prescription Sales (US$bn) . 71
Table: Top 10 Drugs By US Sales (US$bn) . 71
Table: Top 10 Companies By US Dispensed Prescriptions (mn) . 73
Table: US Dispensed Prescription Drug Distribution By Channel Distribution Volume (mn) . 76
Table: Population By Age Group, 1990-2020 (‘000) . 95
Table: Population By Age Group, 1990-2020 (% of total) . 96
Table: Key Population Ratios, 1990-2020 . 97
Table: Rural And Urban Population, 1990-2020 . 97
Table: Pharmaceutical Business Environment Indicators . 102
Table: Weighting Of Components . 103