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With the patent cliff clearly in pharma's rear-view, forecasts have finally begun to reflect the industry's turn-around—with its robust pipeline leading the way.
Market research firm EvaluatePharma, for instance, offered its annual “World Preview 2014, Outlook to 2020,” yesterday and estimates that the consensus forecast of worldwide drug sales will reach new heights in six years—hitting the $1 trillion mark for the first time in worldwide prescription drug sales by 2020. Their research also found that in the past 10 years, the industry spent over $1.2 trillion in R&D.
“The patent cliff is now a distant memory,” wrote the report's author, EvaluatePharma head of operations Paul Hills. “This much improved growth outlook comes as welcome news after two years of actual sales stagnation.”
In last year's forecast, EvaluatePharma said that the years running into 2018 would see a “4.4%” annual growth rate but—due to a number of industry movements in the past year—the firm revised its outlook this year to 5.1% , as it deemed 2013 “the best year ever for new drug approvals.”
“The quality of new drugs approved by the FDA in 2013 increased by 43% versus 2012," Hills noted—with quality meaning sales potential. The 2013 drug class is expected “to add over $24.4 billion to total US prescription sales in 2018.
“This exceeds the record-breaking year of 2012 and marks a step-change in innovation and output for the industry since 2009,” he added.
And the best year ever translated into a 46% surge in value for the industry's R&D pipeline, which is now estimated to be worth $419 billion.
Researchers also attribute the rosy revision to “a cushion of soft biological patent expiries,” saying that biologics will make up “52% of the top 100 prescription & OTC drug sales in 2020.” The report goes on to say that between 2014 and 2020, drugmakers will face $259 billion of sales risk from patent expiry, but only “46% [is] expected to materialize due to softer erosions of biological products.”
And if the path to $1 trillion will be paved with biologics, according to EvaluatePharma's estimations, AbbVie and Enbrel's TNFa inhibitors Humira and Enbrel, as well as Sanofi's insulin Lantus, will lead the charge—as the research firm believes those blockbusters will be the top three best-selling products in the US six years down the road. Gilead's HCV cure Sovaldi and J&J's RA drug Remicade round out the rest of the top five.
Of the top 50 US drugs by 2020, EvaluatePharma lists only five which aren't already marketed, including three in the hyped anti PD-1 oncology segment: Bristol-Myer Squibb's anti PD-1 nivolumab, Roche's anti PD-1 RG7446, Merck's anti PD1 pembrolizumab, Gilead's ledipasvir/sofosbuvir HCV combo, and Pfizer's breast cancer treatment/CDK inhibitor palbociclib.
Nivolumab tops the research firm's ranking of the most valuable R&D project, with a net present value of $23 billion. Merck and Roche's PD-1 follow in second and third place, respectively.