U.S. Drug Sales Increase 5.4% In 2005, Expected To Rise At That Rate Until 2010, Report Says

Main Category: Pharma Industry / Biotech Industry
Also Included In: Public Health
Article Date: 27 Feb 2006 - 14:00 PDT

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U.S. prescription drugs sales increased 5.4% in 2005 -- driven by more use of biotechnology products and a decrease in medications purchased from abroad -- and should continue to increase annually by at least that rate until 2010, according to a report released Wednesday by IMS Health, Bloomberg/Philadelphia Inquirer reports. Sales in 2005 reached $251.8 billion, up from $238.9 billion in 2004. Biotechnology drugs, such as Genentech's Rituxan cancer treatment and Amgen's Aranesp anemia treatment, experienced a 17.2% increase in sales, rising to $32.8 billion. Sales of drugs obtained from Canada through Internet pharmacies dropped 23% to $349 million, helping support U.S. sales, Bloomberg/Inquirer reports. According to Bloomberg/Inquirer, sales increased in 2005 despite FDA approving fewer new products, some drug launches producing lower-than-expected sales and generic competition strengthening. For 2006, seven new drugs, such as Pfizer's Sutent cancer drug and Exubera inhaled insulin, are expected to have sales of at least $1 billion each, according to Bloomberg/Inquirer. Prescription sales could increase 5% to 8% annually for five years with the start of the new Medicare prescription drug benefit, which could stimulate a 1% to 2% increase in 2006 sales, according to IMS. Thus far in 2006, the number of prescriptions for consumers older than age 64 has increased about 5% over the same period in 2005.

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"Prescription volumes are increasing, demonstrating growing demand for pharmaceutical products at lower prices than the market has sustained in the past. We expect this trend to continue throughout this year as millions of seniors begin receiving prescription drug coverage under Medicare," IMS spokesperson Diana Conmy said. IMS spokesperson Marc Benoff added, "Importation is no longer as significant a market issue as it was two years ago." Miller Tabak & Co. analyst Les Funtleyder said 2004 and 2005 were "the nadir for new products. Growth in general is driven by new products. There wasn't anything terribly exciting." Funtleyder said that in the future better growth prospects appear to be in autoimmune diseases, cancer and diabetes. He said that generics will be a major source of growth in the next two years as Merck's cholesterol drug Zocor and Pfizer's antidepressant Zoloft lose their patents. He said, "2006 is going to be a tough year for branded companies. 2007 is going to be tough. In the aggregate, '08 is when things start to look better" (Moore, Bloomberg/Philadelphia Inquirer, 2/23).

A release of the report is available online.

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