IMS Reports 11.5 Percent Dollar Growth in 2003 U.S. Prescription Sales; Growth is Sustained by New Products Despite a Difficult Year
FAIRFIELD, Conn.--(BUSINESS WIRE)--Feb. 17, 2004--IMS Health (NYSE: RX) today reported that U.S. prescription drug sales grew 11.5 percent to $216.4 billion in 2003, compared with $194 billion in sales the previous year. Prescription product sales data are derived from the IMS National Sales Perspectives(TM) service and reflect wholesale prices. IMS is the world's leading provider of information solutions to the pharmaceutical and healthcare industries.
"As we predicted, 2003 pharmaceutical growth remains constant in comparison with 2002," said Paul Wilson, vice president, IMS Statistical Services. "This solid performance demonstrates the strength of the pharmaceutical industry given the economic climate this year and the scrutiny the industry has undergone by the government, the news media and the general public."
Generic and biotech dollar sales were key contributors to 2003 pharmaceutical sales results. Generic dollar sales grew by more than 22 percent and biotech grew by 22 percent as well. Also affecting results last year were the impact of prescription to over-the-counter (OTC) switching, continuing safety concerns about the use of hormone replacement therapy (HRT) and the growth of reimportation of prescription drugs from Canada. IMS estimates U.S. reimportation of prescription pharmaceuticals from Canada was equivalent to $1.1 billion U.S. dollars (based on U.S. prices) last year.
"The constancy of this year's sales growth is a by-product of the market traction produced by new products," Wilson explained. "The number of U.S. new molecular entities approved in 2003 was 21 vs. 17 in 2002.
"Notable new products introduced in late 2002 or 2003 included two new cholesterol treatments: AstraZeneca's new statin Crestor(R) and Schering/Merck's Zetia(TM), as well as the first non-stimulating ADHD treatment, Eli Lilly's Strattera(R)." Adds Wilson, "IMS's anonymized longitudinal prescription database shows that approximately seventy-five percent of patients newly prescribed with Strattera in August to December 2003 were from patients who were newly starting on ADHD treatment. During the same time period, seventy percent of patients newly prescribed with Crestor or Zetia were from patients who were newly starting on statins. Pfizer's Lipitor(R), however, has maintained its lead position in the cholesterol reducers market with relatively few patients switching to the newer products."
Two additions to the erectile dysfunction market, GlaxoSmithKline's Levitra(R) and Lilly/Icos's Cialis(R), had their U.S. launches in 2003. The impact of these drugs on sales of Pfizer's blockbuster Viagra(R) continues to be monitored, as these launches came late in the year. Initial IMS findings indicate, however, that Viagra is holding on to a high market share, currently over 85 percent. "Given the strong promotional campaigns of the two newcomers, Levitra and Cialis, this market will continue to expand and the battle for market share will play out in 2004," comments Mary Beth Lawrence, vice president, IMS Consulting. "Interestingly, we saw a trend change in overall Direct-to-Consumer (DTC) spending, which had been flat in 2002. Early indications are that full year 2003 spend will show a double-digit increase."
U.S. Prescription Distribution Channels
Retail pharmacies (chains, independents, food stores, mass merchandisers) remained the primary distribution channel for U.S. prescription drugs in 2003, capturing 59.8 percent total market share.
Chains and mass merchandisers were the largest sector with 36.3 percent of market and a solid growth of 11.4 percent. Mail service sales remained the fastest-growing retail sector last year, rising 15.5 percent and capturing 13.2 percent market share. Clinics were the fastest-growing non-retail channel last year, with more than 22 percent growth over 2002. Long-term care facilities continued to show strong growth with a 17.3 percent increase over last year, yielding a market share of 3.6 percent.
"We continue to see a higher growth rate in mail service, where 90-day supply is typical. The growth results from higher co-pay and incentives adopted by managed care plans," explains Wilson. "IMS also sees higher growth in the non-retail channels which is linked to introduction and growth rates of innovative injectable products such as Amgen's Aranesp(R) for anemia and Abbott's Humira(R) for rheumatoid arthritis."
U.S. Prescription Market Share by Distribution Channel, 2003
Wholesale prices, sales include prescription products only.
Source: IMS National Sales Perspectives(TM), 2/2004
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2003 Sales Percent Growth Market Share
(US$ Billions) Year-Over-Year In 2003
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1 Chain Stores/ Mass
Merchandisers 78.6 11.4 36.3
2 Independents 31.6 7.5 14.6
3 Mail Service 28.6 15.5 13.2
4 Non-Federal Hospitals 22.9 6.2 10.6
5 Clinics 19.5 22.1 9.0
6 Food Stores 19.3 8.2 8.9
7 Long-Term Care 7.8 17.3 3.6
8 Federal Facilities 3.4 13.2 1.6
9 Home Health Care 2.2 6.3 1.0
10 HMO (Staff Model) 1.5 2.9 0.7
11 Miscellaneous 0.9 10.3 0.4
Total 216.4 11.5 100
Note: Results for the Mail Service channel have not been projected,
but IMS estimates they represent approximately 90% of sales. OTC
insulins have not been included.
Leading U.S. Therapy Classes
The top ten therapy classes accounted for 35.1 percent of total U.S. prescription sales in 2003 and grew 10.5 percent over the prior year, as measured by U.S. dollars at wholesale prices. Seven of the top ten classes experienced double-digit growth.
The top six classes remained in the same position as 2002. Cholesterol-reducing statins were first, with sales of $13.9 billion and 6.4 percent total market share. Sales in the seizure disorders class grew fastest among the top ten therapy classes again last year, with 24.4 percent growth in 2003, yielding a sales volume of $6.9 billion.
Existing branded products drove most of the dollar growth in these therapeutic areas, with generic penetration and OTC availability lowering the growth in some of these classes. The antihistamines class was hit the hardest of the top ten and experienced a negative growth of 28.3 percent in 2003, the first full year that Claritin(R) was off patent.
"The proton pump inhibitors (anti-ulcerants) and the SSRI/SNRI (antidepressants), the number 2 and 3 classes respectively, held their market positions last year even though consumers had the choice of a generic substitute(s) in both classes, along with the additional competition of an OTC anti-ulcerant, AstraZeneca's Prilosec OTC(TM)," remarked Doug Long, vice president of IMS Industry Relations. "The antihistamine (allergy) class slipped to ninth position from seventh the prior year due to OTC competition from Schering-Plough's Claritin(R) OTC."
As the Food and Drug Administration looks to evaluate new OTC entrants and managed care focuses on encouraging generic and OTC options, tiering, co-pay and formulary analyses are becoming integral to pharmaceutical industry brand management decisions. "Many managed care plans introduced or extended the products covered in the more expensive co-pay tiers," commented Lawrence. "Payers are increasingly turning to benefit design, including multi-tier formularies, to more effectively manage prescription costs through incenting the use of generics, OTC, and lower price branded products."
Top 10 Therapeutic Classes by U.S. Prescription Sales, 2003
Wholesale prices, sales include prescription products only.
Source: IMS National Sales Perspectives(TM), 2/2004
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2003 Sales Percent Growth
(US$ Billions) Year-Over-Year
----------------------------------------------------------------------
1 Cholesterol Reducers 13.9 10.9
2 Proton Pump Inhibitors (anti-ulcerants) 12.9 12.6
3 SSRI/SNRI (antidepressants) 10.9 11.9
4 Antipsychotics 8.1 22.1
5 Erythropoietins (anemia) 7.4 16.3
6 Seizure Disorders 6.9 24.4
7 COX-2 Inhibitors (anti-arthritics) 5.3 9.1
8 Calcium Blockers 4.4 -0.5
9 Antihistamines 3.5 -28.3
10 Codeine & Combinations 3.2 14.3
Total 76.5 10.5
Leading U.S. Prescription Products
Pfizer's Lipitor, a cholesterol reducer, was the leading U.S. prescription drug in 2003 for the third year running, with sales of $6.8 billion and 10.8 percent year-over-year growth. Merck's Zocor(R) - another cholesterol reducer - remained in second place, with $4.4 billion, while TAP's gastro-intestinal product, Prevacid(R), kept its third place position. AstraZeneca's Prilosec(R) fell out of the top ten this year - it ranked No. 4 in 2002 and No. 2 in 2001 - as a result of the generic introduction of omeprazole in late 2002.
AstraZeneca's strategy to convert patients to Nexium(R) has been relatively successful, with that product filling the No. 7 place this year with $3.1 billion and the highest growth rate in the top ten with 57.7 percent.
Sales of Ortho Biotech's Procrit(R) were $3.3 billion, moving it up to No. 4 from No. 5 last year. Zyprexa(R), Lilly's psychotherapeutic, moved into No. 5 with $3.2 billion in sales. Zoloft(R), Pfizer's SSRI/SNRI antidepressant, managed another year of double-digit growth (11.5 percent) and remained in the top ten with $2.9 billion despite generic availability in the class.
Top 10 U.S. Prescription Products by Sales, 2003
Wholesale prices, sales include prescription products only.
Source: IMS National Sales Perspectives(TM), 2/2004
----------------------------------------------------------------------
2003 Sales Percent Growth
(US$ Billions) Year-Over-Year
----------------------------------------------------------------------
1 Lipitor(R) 6.8 10.8
2 Zocor(R) 4.4 7.0
3 Prevacid(R) 4.0 11.8
4 Procrit(R) 3.3 3.7
5 Zyprexa(R) 3.2 6.6
6 Epogen(R) 3.1 6.5
7 Nexium(R) 3.1 57.7
8 Zoloft(R) 2.9 11.5
9 Celebrex(R) 2.6 -0.5
10 Neurontin(R) 2.4 19.3
Total 35.7 11.5
Largest Pharmaceutical Companies by U.S. Sales
The rank order of the top seven pharmaceutical companies in 2003 remained consistent with 2002. "The challenge of growth is most steep for large companies already working off a large sales base. In addition, many of the large companies had to contend with the effects of patent expirations, for example, GlaxoSmithKline's Paxil(R) and Augmentin(R), Johnson & Johnson's Ultram(R), Bristol-Myers Squibb's Glucophage(R), AstraZeneca's Prilosec and Zestril(R), and Eli Lilly's Prozac(R)," explained Wilson.
Pfizer, the leading pharmaceutical company in 2001 and 2002 as measured by prescription sales, experienced 9.7 percent dollar growth and $29.2 billion in sales in 2003, buoyed by its merger with Pharmacia in the spring of last year. GlaxoSmithKline, No. 2, had sales of $18.6 billion with 4.6 percent growth over 2002. Johnson & Johnson remained in third position with $15.2 billion in sales, a 14 percent increase over prior-year. AstraZeneca was the only company in the top ten to experience negative growth last year with sales down 5.8 percent. This dip was due primarily to continuing repercussions of Prilosec and Zestril going off patent. Even so, AstraZeneca has remained in fifth position.
Novartis had the second highest growth rate in the top ten with 23.8 percent and $9.5 billion supported by growth of Zelnorm(R), the company's new irritable bowel syndrome product introduced late in 2002, and the growth of its generic business.
Amgen, the maker of Epogen(R) and other break-through biotech products, was the first biotech manufacturer ever to make the top ten. Breaking in this year at No. 8, Amgen achieved $7.7 billion in sales and significant growth of 34.7 percent, the highest growth rate in the top ten this year.
The ten largest pharmaceutical companies, as measured by U.S. prescription product sales, accounted for more than half of total U.S. prescription sales in 2003, with a combined market share of 59.6 percent - still a relatively fragmented industry.
Top 10 Pharmaceutical Companies by U.S. Prescription Sales, 2003
Wholesale prices, sales include prescription products only.
Source: IMS National Sales Perspectives(TM), 2/2004
----------------------------------------------------------------------
2003 Sales Percent Growth
(US$ Billions) Year-Over-Year
----------------------------------------------------------------------
1 Pfizer 29.2 9.7
2 GlaxoSmithKline 18.6 4.6
3 Johnson & Johnson 15.2 14.0
4 Merck and Co. 14.1 9.1
5 AstraZeneca 10.4 -5.8
6 Bristol-Myers Squibb 9.6 6.6
7 Novartis 9.5 23.8
8 Amgen 7.7 34.7
9 Wyeth 7.6 4.9
10 Lilly 7.5 11.7
Total 129.4 9.6
Note: Excludes co-marketing agreements. Joint ventures assigned to
product owner. Data run by custom redesign to include completed
mergers and acquisitions.
Prescription Volumes
While year-over-year growth in the volume of brand drug prescriptions languished again last year, generic drugs grew at a healthy rate of 9.2 percent on a total dispensed prescription basis. The top five companies as measured by U.S. generic (excluding branded generic products) dollar sales were: Teva, Mylan/UDL, Watson, Sandoz/LEK and Alpharma.
"Generics reached new highs in both dollars and prescriptions in 2003," explained Long. "Total and new prescriptions dispensed climbed to 43 percent and 47 percent market share respectively."
Future Outlook
Looking forward to 2004 results, IMS predicts the U.S. pharmaceutical industry will continue to grow at a solid and steady rate of between 11-12 percent. This projected rate remains faster than the global growth rate, which is projected at 8-11 percent (compounded) through 2007. New product innovation, population demographics, the FDA acceleration of new product approvals, and an attractive list of potential blockbusters will help to drive this growth.
Top innovative products expected in 2004 in terms of sales potential include Eli Lilly's Cymbalta(TM), Forest's Namenda(TM) and Genentech's Avastin(TM). Cymbalta is entering the large antidepressant market and is expected to receive approval for urinary incontinence as well. Namenda is the first NMDA-receptor antagonist indicated for the treatment of patients with moderately severe to severe Alzheimer's disease and vascular dementia. Avastin is indicated for colorectal cancer.
"It will also be interesting to see whether several new combination products have successful launches, including Pfizer's Caduet(R) to treat hypertension and high cholesterol, Eli Lilly's Symbyax(TM) to treat bipolar depression and Merck/Schering-Plough's Zocor/Zetia combination to treat high cholesterol," adds Wilson.
IMS forecasts about 30 new chemical/molecular entities launching in the U.S. during 2004, with a dozen having the potential to reach blockbuster status, once launched. Wilson explained that only three potential blockbusters launched in the U.S. last year (Crestor, Humira, Raptiva), which shows renewed strength in the market. Sales increases from these 2004 launches may, however, be offset by continuing generic penetration.
"2004 results will hinge on innovation, new products, the introduction of Medicare discount cards, and trends in cost containment. It looks to be another strong and exciting year for pharma," concluded Wilson.
About IMS
Operating in more than 100 countries, IMS is the world's leading provider of information solutions to the pharmaceutical and healthcare industries. With $1.4 billion in 2003 revenue and 50 years of industry experience, IMS offers leading-edge business intelligence products and services that are integral to clients' day-to-day operations, including marketing effectiveness solutions for prescription and over-the-counter pharmaceutical products; sales optimization solutions to increase pharmaceutical sales force productivity; and consulting and customized services that turn information into actionable insights. Additional information is available at imshealth.com. |
