For Global Health Resources Subscribers          |          October 2009             |          Volume 10 Issue 10

• Growth prospects in the U.S. market improve. Near-term growth prospects in the U.S. have strengthened in recent months, reflecting both sustained levels of price increases and changing inventory stocking patterns. Pharmacy chains are more tightly managing their inventory levels based on expectations of patient demand, which has led to greater purchasing volatility than in previous years. This also has played a role in unusually high sales growth in the first quarter of 2009 relative to forecast expectations. U.S. market growth in 2009 is now expected to be 4.5 - 5.5 percent, and 3 - 5 percent in 2010. While payers seek to limit price increases and boost the use of lower-cost generics, pharmaceutical manufacturers are expected to maintain their pricing practices, competing on the basis of clinical evidence and value. Current pricing practices by the industry also include the use of off-invoice discounts and rebates, which are not reflected in IMS’s forecast and reported data, and are understood to be increasing.
• Economic downturn affects markets to varying degrees. Growth has slowed in countries where there is high out-of-pocket spending on pharmaceuticals and steep declines in macroeconomic activity, especially in Russia, Mexico and South Korea. At the same time, growth has been less affected to date in countries where drugs are largely funded publicly, such as in Germany, Japan and Spain. However, new cost-containment measures expected to be introduced during the forecast period likely will impact the pace of growth in these markets. In the U.S., pharmaceutical manufacturers’ efforts to expand access to and awareness of patient assistance programs, as well as co-pay subsidies for patients in need, are limiting the impact of the economic downturn to some extent.
• Impact of the innovation/patent loss imbalance dampens growth prospects. Consistent with trends of the past several years, the next five are expected to reflect a significant imbalance between new product introductions and patent losses. This is the primary factor limiting global pharmaceutical market growth to the mid-single digits through 2013. During the next five years, products that currently generate an unprecedented $137 billion in sales are expected to face generic competition, including Lipitor®, Plavix®, and Seretide®. At the same time, new products that will enable innovative approaches for treating patients suffering from diseases such as osteoporosis, respiratory ailments, thrombosis, multiple sclerosis and cancer are not expected to generate the same magnitude of sales as products losing patent protection.
• Pharmerging markets in aggregate sustain strong growth. Despite economic conditions significantly affecting some markets – notably Russia, Turkey, South Korea and Mexico – the seven pharmerging countries are expected in aggregate to grow by 12 - 14 percent in 2010, and 13 - 16 percent over the next five years. China’s pharmaceutical market is expected to continue to grow at a 20+ percent pace annually, and contribute 21 percent of overall global growth through 2013. Russia and Turkey may be impacted significantly by new measures intended to reduce the level of healthcare spending in those two markets.
• Healthcare access and funding under intensifying pressure. The economic climate has heightened concerns by payers about healthcare funding, and intensified their efforts to limit access to non-generic drugs. During the next five years, markets will be impacted by numerous payer actions, including the imposition of price cuts on existing drugs, the raising of standards required to achieve reimbursement of innovative therapies, and the use of economic incentives for prescribers and pharmacists to drive a shift to generic alternatives. Evidence of the value that medicines bring to healthcare systems will be required to achieve access and funding in both developed and emerging markets.

A number of events may occur in 2010 that also could have a long-term effect on the pharmaceutical market. These include the potential for passage of comprehensive healthcare reform in the U.S. as well as legislative or regulatory actions in other countries, the magnitude of the H1N1 pandemic, and the timing and extent of the global economic recovery.

“While our outlook for the global market is more positive than earlier in the year, the fundamental dynamics of the innovation cycle, funding pressures, and the broader macroeconomic environment will result in mid-single-digit growth over the next five years,” noted Aitken. “Notwithstanding the improved prospects in the U.S. market, the drive by pharmaceutical manufacturers to adapt to the longer-term marketplace trends and evolving patient needs will continue undiminished.”

Source: IMS Health Press Release, October 7, 2009

Who Has the Most User-Friendly Healthcare System in Europe?
European Federation of Pharmaceutical Industries and Associations, September 28, 2009

French Hospital Rankings Give Pause for Thought
Ross Tieman, Financial Times Health Blog, September 28, 2009

Widening Application Range to Boost MRI Markets in Eastern Europe, Says Frost & Sullivan
PRN Health, http://twitter.com/PRNhealth, September 16, 2009

Innovative Medicines Initiative: Putting Europe at the Forefront of Biopharmaceutical Innovation

EFPIA, http://twitter.com/EFPIA, September 14, 2009

85% of People Would Consider Medical Tourism

MedicaTree International, http://twitter.com/medicatreeinc, September 16, 2009

Providing Health Care in Times of Crisis
WHO Podcast, October 14, 2009

Healthcare Delivery And Spending: Big Impact On Cancer Survival

Michel Coleman, Audio Medica, September 3, 2009

BridgeHealth Medical, Inc., the nation’s premier provider of medical travel services, today announced a ground-breaking partnership with Medtral New Zealand,  provider of world-class, affordable healthcare. With all-inclusive travel and medical treatment packages to New Zealand, Medtral’s services will serve as part of BridgeHealth’s ever-expanding and comprehensive network of medical travel options. 
 
“This partnership represents an unparalleled opportunity for our clients to gain access to high quality medical procedures in a friendly, first world country that is internationally praised for its green, clean practices,” says Victor Lazzaro, Jr., CEO of BridgeHealth. “Through our comprehensive network, they can have procedures performed in top-flight facilities by medical specialists who speak English as their first language and who have typically received their specialist training in either North America, the United Kingdom, as well as New Zealand.” 

New Zealand is highly accessible for patients residing on the west coast of the United States-- with daily 12-hour direct flights -- and offers world-class medical treatment at a significantly lower cost than the comparable U.S. procedure. 

“New Zealand is not only one of the most affordable destinations for medical care, but it also offers a location that is culturally familiar to most Americans and Canadians, with extraordinary tourism opportunities, including stunning scenery, winery tours, golf, and fly fishing,” says Edward Watson, M.D., executive chairman for Medtral. “As recent patients from the US have said, their medical experience in New Zealand has been life changing.” 

Medtral New Zealand will offer BridgeHealth clients services including travel, accommodation, hospital procedures, and post-operative care at New Zealand’s premier private medical facilities and contingency insurance. Adhering to Quality Health New Zealand (QHNZ) and International Society for Quality in Health Care (ISQua) accreditation standards, this extensive network of hospitals provides a world-class experience and service for BridgeHealth International’s patients. 

Medtral New Zealand’s medical procedures include (among others): 

• Total Hip Joint replacement 
• Total Knee Joint replacement 
• Hip Resurfacing 
• Coronary Artery Bypass Graft Surgery (CABG) 
• Robotic Prostatectomy 
• Kidney and liver transplants 
• In vitro fertilization