Report says drooping revenues for branded drugs is the new normal

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Amid a parade of reports that pharma isn't getting as much money for its new-to-market drugs as it once did, research by IBISWorld suggests that this the new normal.

The research firm expects industry branded sales to fall an average of 2.6% every year between 2013 and 2017 (branded drug sales are expected to finish 2012 down 3% to 5%). The firm blames generics for part of the downturn, but also says that the future of new drugs isn't going to balance things out any time soon. In fact, IBISWorld expects revenue to hit $115 billion in 2017, which amounts to a 0.4% annual gain between 2013 and 2017.

With this expected performance, the firm lands on solvency solutions that have become familiar: layoffs. In this case, IBISWorld expects the industry to lay off almost 1% of its workforce every year for the next five years, which translates into more than 125,000 lost jobs throughout the industry, including those in R&D.

The projected downsizing is not just in jobs. The research group expects the number of industry players to shrink through a combination of mergers and acquisitions and a dearth of new startups. Those companies that perform will be the ones with specialty pharmaceuticals flowing through their pipelines, a line the research firm expects will grow at twice the rate of traditional products between 2013 and 2017.
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