Posts Tagged ‘Policy’

Report forecasts global spending on medicines to cross $1.1 trillion by 2015

Tuesday, June 21st, 2011

Press Release

Slowing Growth in Developed Markets as Patent Expiries and Policy Changes Take Hold

PARSIPPANY, NJ, May 18, 2011 – The IMS Institute for Healthcare Informatics today reported that global spending for medicines will reach nearly $1.1 trillion by 2015, reflecting a slowing compound annual growth rate of 3-6 percent over the next five years. This compares with 6.2 percent annual growth over the past five years. Lower levels of spending growth for medicines in the U.S., the ongoing impact of patent expiries in developed markets, continuing strong demand in pharmerging markets, and policy-driven changes in several countries are among the key factors that will influence future growth, according to the IMS Institute’s new study, The Global Use of Medicines: Outlook Through 2015.

“The future level of spending on medicines has striking implications for healthcare systems and policy makers across the developed and emerging economies,” said Murray Aitken, executive director, IMS Institute for Healthcare Informatics. “Past patterns of spending offer few clues about the level of expected growth through 2015. There are unprecedented dynamics at play, which are driving rapid shifts in the mix of spending by patients and payers between branded products and generics, and across both developed and pharmerging markets.”

In its latest analysis, the IMS Institute identifies the following dynamics:

  • Brands accelerate their decline in share of spending. While aging populations in developed markets will continue to drive incremental spending on brands, this will be more than offset by the impact of patent expiries. As a result, spending for branded products in developed markets will remain at the same level in 2015 as in 2010. Globally, market share for branded medicines, which fell from 70 percent in 2005 to 64 percent in 2010, is expected to decline further through 2015, to 53 percent. While growth for branded products in the emerging markets will be robust, 80 cents of every dollar spent on medicines in these markets in 2015 will be for generics.
  • Unprecedented level of patent expiries brings “patent dividend” to developed markets. Expiring patents for branded products will yield $98 billion in net savings to payers in developed countries through 2015, compared with $54 billion in savings realized in the five years to 2010. Patent expiries will save payers $120 billion by 2015, offset by $22 billion of expected generic spending for these medicines. Among developed markets, the U.S. will experience the largest expansion of generic spending, while Japan will continue to have the lowest share despite significant policy incentives to increase generic prescribing and dispensing.
  • Novel therapies address unmet patient needs. Recent and upcoming launches of new medicines will bring important new treatment options to extend or improve patients’ quality of life. These include: oral medications for multiple sclerosis with increased efficacy and patient convenience; two recently launched treatments for arrhythmia that expand therapy options for the first time in decades; treatments for metastatic melanoma that improve survival rates; and the first therapeutic prostate cancer vaccine, a breakthrough advance in personalized medicine.
  • Pharmerging markets approach U.S. levels of spending on medicines. Over the next five years, the pharmerging markets are expected to nearly double their spending on medicines, to $285-315 billion, compared with $151 billion in 2010. This will be fueled by strong economic growth and governments’ commitment to expanded healthcare access. The IMS Institute forecasts that by 2015, the pharmerging markets will become the second largest geographic segment globally in spending on medicines – surpassing Germany, France, Italy, Spain and the U.K. combined, and approaching U.S. levels.
  • Health policy decisions affect spending in the long term. 2010 policy decisions that will affect spending for medications during the next five years include: the passage of the Affordable Care Act in the U.S., which will expand health insurance coverage to 25-30 million Americans; price controls in China to ensure the sustainability of universal coverage; Japan’s first price cut under its new protected innovative products policy; price reductions to generics and off-patent products in Spain and Italy; and mandatory cost-benefit evaluations for new products in Germany. Additionally, rebates and discounts, which are not reflected in IMS audits, are being applied more extensively by public and private payers, particularly in the U.S., France and Germany. The amount of these off-invoice discounts in 2010 is estimated to be $60-65 billion, and will rise to $65-75 billion by 2015.
  • Biosimilars evolve rapidly, but adoption limited. By 2015, the IMS Institute expects spending on biosimilars to exceed $2 billion annually, or about 1 percent of total global spending on biologics. New biosimilars are expected to enter the U.S. market by 2014, and European markets will see additional biosimilar molecules introduced during this period. This will accelerate spending for biosimilars over the 2010 level of $311 million.

The IMS Institute also identified the leading therapeutic classes in 2015. These include: Oncology, which is expected to remain the leading therapy class but with slowing growth of 5-8 percent as existing targeted therapies already have been widely adopted; diabetes treatments, where spending is forecast to be 4-7 percent, driven by the rising prevalence of the disease and by the uptake of newer oral antidiabetic agents; asthma and COPD treatments, where growth is expected to slow to 2-5 percent; and lipid regulators, where spending will fall to $31 billion in 2015 from $37 billion in 2010

Said Aitken, “Over the next five years, we’ll not only see total spending exceed $1 trillion, but payers will be managing a significant patent dividend while emerging market governments seek to expand treatment options to more patients. All of this will require that healthcare stakeholders engage in a truly meaningful dialogue as they seek the common goal of increased access, cost reductions and better outcomes.”

To access the IMS Institute report, The Global Use of Medicines: Outlook Through 2015, go to The study also features additional details related to global country rankings, spending on medicines in the developed and pharmerging markets, and forecast summaries on spending by country.

Analyses conducted for The Global Use of Medicines: Outlook Through 2015 report are based on IMS audits and include all types of biopharmaceuticals, including biologics, OTC, and traditional medicines distributed and administered through regulated delivery systems such as pharmacies, hospitals, clinics, physician offices, and mail order, where applicable. Spending figures are derived from IMS Market Prognosis™ and are reported at ex-manufacturer estimated prices that do not reflect off-invoice discounts and rebates. IMS MIDAS™, Lifecycle™ R&D Focus, Lifecycle™ New Product Focus, PharmaQuery™ and Therapy Forecaster™ were also used for assessing worldwide healthcare markets, therapy class and product dynamics and country-level pricing and reimbursement complexities. More detail on information sources is included in the report.

About the IMS Institute for Healthcare Informatics
The IMS Institute for Healthcare Informatics provides key policy setters and decision makers in the global health sector with unique and transformational insights into healthcare dynamics derived from granular analysis of information. It is a research-driven entity with a worldwide reach that collaborates with external healthcare experts from across academia and the public and private sectors to objectively apply IMS’s proprietary global information and analytical assets. More information about the IMS Institute can be found at:


Source of this press release: Click here

New publication: “Lead Market Factors for Global Innovation: Emerging Evidence from India”

Tuesday, April 5th, 2011

Lead Market Factors for Global Innovation: Emerging Evidence from India

By: Rajnish Tiwari and Cornelius Herstatt

Hamburg University of Technology (TUHH)

Institute for Technology and Innovation Management

Schwarzenbergstrasse 95, D-21073 Hamburg, Germany

Tel. +49 – (0)40 – 42878 3776 / Fax: +49 – (0)40 – 42878 2867


Securing access to “lead markets” is generally regarded as a key driver for the increasing globalization of innovation since these are considered to be “early indicators” for emerging customer needs. Such markets, therefore, offer a good chance of uncertainty reduction for in the innovation process of firms.  Lead markets are generally defined in terms of product segments within national boundaries and are thought to exist in economies with high per capita income, highly sophisticated markets and high international visibility.

We argue that there is increasing evidence of lead market tendencies in certain emerging economies, e.g. India. Both domestic and foreign-owned firms there, in recent years, have produced several internationally acclaimed “frugal innovations”, such as the Tata Nano or GE’s handheld ECG machine Mac400. Using several examples we demonstrate that India seems to have emerged as a global hub for low-cost, frugal innovations.

In this paper, we seek to crystallize the role of lead markets in globalization of R&D and identify the need for an update/extension to better reflect the changed ground realities. On the basis of emerging evidence we propose that sustained economic growth, voluminous markets, strong domestic technological capabilities, presence of foreign-owned R&D, and favorable government policies may be able to offset some of the disadvantages rooted in traditional deficiencies. Engaging a developing country lead market may be useful for firms in securing better access to markets at the bottom of the economic pyramid worldwide.

Keywords: Lead Markets; Global Innovation; Globalization of Innovation; Internationalization of R&D; Bottom of the Pyramid; Frugal Innovations

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Benevolent Benefactor or Insensitive Regulator? Tracing the Role of Government Policies in the Development of India’s Automobile Industry

Tuesday, March 22nd, 2011

New publication

by Rajnish Tiwari, Cornelius Herstatt, and Mahipat Ranawat

Policy Studies, No. 58

Publisher: Honolulu: East-West Center
Publication Date: 2011
ISBN: 978-1-932728-90-3
Binding: paper
Pages: xiv, 64
Price: $10.00

Free Download: PDF


The impressive and sustained growth of India’s automobile industry in recent years has catapulted it into the league of the world’s top-seven producers of four-wheelers. In the past decade, its exports have surged more than 25 percent a year on average. The turning point was arguably the 1991 policy of economic liberalization, but the impact of the reforms might have been subdued, if the Government of India had not played a pivotal role in the industry’s evolution. This apparent “paradox” may be the key to understanding why the industry has adjusted so quickly to globalization, even though economic reforms began relatively late.

This study identifies the main thrusts of policy regimes for the automobile sector since 1947, which began in an overregulation mode in the early period of independence. Nonetheless, the government consciously attempted to create and sustain favorable “innovation systems” at national, regional, and sectoral levels. Especially since 1991, many policy initiatives have benefited the industry and helped it reach the growth path it is following today.


India rejects Abbot lab’s patent application for HIV drug

Wednesday, January 5th, 2011

A report appearing in the Economic Times (Dec. 5, 2011) says:

MUMBAI: India has rejected a drug patent application of a US multi-national pharma company, paving way for easy access to an important life-saving medication for HIV patients across the globe.

The decision to reject the patent application on the important combination drug, Lopinavir/Ritonavir filed by Abbot Laboratories was given by the Indian patent office here during the weekend and it is a major victory to millions of HIV-positive patients around the globe, according to NGOs working with affected patients.

The Indian patent office has put a halt to the multi-national Abbott Laboratories patenting and said it was not an invention. […]

[…] I-MAK was one of the opponents from US and others were Indian pharma companies like Cipla (Mumbai), Matrix Laboratories (Secunderabad) and Okasa Pharmaceuticals (Mumbai).


India liberalizes forex policy regime to encourage global technological collaborations

Friday, May 14th, 2010

The move could lead to greater diffusion of global innovations in India. Additionally, it could have a positive effect on incremental innovations and research and development (R&D) activities being carried out by both domestic and multi-national corporations (MNCs).

Firms can draw forex to pay royalty without nod: RBI

MUMBAI: The Reserve Bank on Thursday permitted banks to let firms draw foreign exchange for payment of royalty for technical know-how overseas without government’s prior permission, a move that will encourage technological collaborations. With this, RBI has operationalised the Government’s decision to do away with the requirement of seeking its permission in this regard. Earlier, the permission of Commerce and Industry Ministry was required for drawing foreign exchange to pay royalty for technical collaborations in case it exceeds 5% of local sales and 8% of exports. Such permission was also required, if such payments exceed $2 million. RBI said in a notification, “Banks may permit drawal of foreign exchange by persons for payment of royalty and lumpsum payment under technical collaboration agreements without the approval of ministry of commerce and industry.”

Source: Economic Times Mumbai; Date: May 14, 2010; Section: EFM; Page: 15

Also see: Reserve Bank of India’s circular dated 13.05.2010