Emerging markets set to boost pharma industry

Demand from emerging markets is set to boost the pharma industry, with a new report indicating that new markets will nearly double their spend on medicine over the next five years from $194 billion in 2011 to $345-375 billion in 2016.

Healthcare analysts at IMS Health have released a report entitled 'The Global use of Medicines: Outlook through 2016,' finding that an increase in income levels, as well as the increased affordability of medicine and the roll-out of government healthcare programmes for poorer patients, will almost double demand from emerging countries.

However, despite the increase in demand and having two thirds of the world's population, emerging markets will still only consume a third of the world's medicine. This shows there is still plenty of growth to come in these regions, and pharma groups will be well aware of this.

Other findings from the report showed that annual per capita spending on medicine in developed economies is expected to be over six times higher than in EMs, at an average of $609 per head compared to $91. The average Indian will still only consume $33 of medicine per year compared to $892 for the average US citizen, the Financial Times has reported.

The rise in developing nations will dilute the market share held by leading countries such as France, Germany, Italy, Spain and the UK. Each country will see around a four per cent drop in their share of the market, which may be exacerbated by slow economic growth and pressure on health budgets.

One of the key findings from the report is that the major growth area will be in generic rather than branded medicines. Generic medicines will grow from 57 per cent of the total spend on medicines in emerging markets in 2011 to 65 per cent in 2016, while branded products shrink from 30 to 24 per cent of the market.

Posted by Ben Evans