Report says Canadian pharmaceutical market to reach $19B in 2007

Montreal, QC – The Canadian pharmaceutical market is expected to grow 6.0 – 6.5% in 2007 to $19 billion in drug store and hospital sales, according to IMS Health figures released today. This year’s market growth is slower than the 8.4% average rate achieved from 2002 to 2006. The global pharmaceutical market is expected to expand by 6 – 7% in 2007, a growth rate similar to Canada’s.

In 2007, growth in the generics and innovative sectors is 20.1% and 3.3%, respectively. Excluding biotechnology products, the growth of innovative therapies is only 1.6% this year. This represents an unprecedented disparity in growth between the two sectors, primarily the result of the large number of patent expirations experienced during the year.

In addition to the strong growth experienced in the generics sector, sales of biotechnology products are up 17.2% in 2007. Biotechnology therapies represent 10% of total pharmaceutical sales in Canada, but are responsible for approximately 24% of the market’s overall growth this year. This growth is being fueled by biological response modifiers and diabetes therapies, offsetting slower sales of oncology products and erythropoiesis-stimulating agents, which have been the subject of safety warnings issued by Health Canada and the US Food and Drug Administration.

Public payer cost-containment initiatives, led by Quebec and Ontario, continue to have a significant impact on drug plan spending. Legislation introduced in the two provinces allows the prices of innovative-sector products to rise to levels just below the Consumer Price Index once agreements are reached with the provinces. At the same time, generics sector products experienced price roll-backs of approximately 21% in 2007.

Also contributing to more moderate pharmaceutical market growth overall is the low number of new products this year. New medicines (new molecular entities and line extensions) launched in Canada in 2007 account for less than 0.3% of total drug store and hospital sales this year as their sales continue to be affected by market-access delays.

Sales represent the wholesale cost of prescription products purchased by Canadian hospitals and drug stores. All dollar figures are in Canadian funds and do not include purchases made by Canadian internet pharmacies for sale to US customers.