IHS Healthcare and Pharma offers up the top 10 drivers of the pharma and healthcare industry for 2014. The global economy, the patent cliff, emerging markets, Japanese innovation, ObamaCare, IRP, and drug shortages to name a few...

1. IHS Healthcare and Pharma
Key Industry Drivers for 2014
Gustav Ando
Director
Healthcare and Pharma

2. 1. The foundations for economic recovery
continue to be in place
•
The global economy is expected to see
a recovery in 2014 and 2015. However,
there is a marked shift in dynamics over
where the growth is expected. Average
growth in emerging markets has fallen
1. The foundations for economic
steadily to 4.7% in 2013, while the
recovery continue to be in place
outlook for advanced markets is stronger
than it has been for many years.
•
Add to this the scarring experience several pharmaceutical companies had in China–amid a
clampdown on marketing practices–and we see several significant players deciding to reset
their agenda in emerging markets.
•
While much attention is focused on the detrimental impact of healthcare reform in general,
the impact will be felt hardest in key European markets –especially Germany, France, UK,
Southern Europe and the Nordics. Interestingly, the global pharmaceutical industry continues
to be heavy dependant and focused on these regions.
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3. 2. The United States’ first full year of ACA
The focus has been on the stuttering implementation of Medicaid
expansion – amid continued political resistance. Midterm elections will
be critical in deciding how fast – or slow – implementation will happen.
1. The cliff is over, meaning that
• The bulk of the patentfoundations for economic the market will return to
recovery continue to be in place
being driven significant increases in pharmaceutical prices
• Health spend will grew 5% in 2013 and is expecting to rise above 6% in
2014 – our assumptions are based on a more gradualistic impact of
Medicaid expansion than for example CMS (which subsequently revised
its estimations).
• Pharmaceutical prices declined dramatically in September 2013 and
there is more pushback from payers on pricing.
•
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4. 3. Europe/Eurozone instability will continue to suppress
public health expenditure
Greece and Italy will experience negative and lower growth
(respectively), with Italy implementing its spending review. Spain is also
declining significantly due to co-payments and procurement.
• Health spend will grow significantly ineconomic
1. The foundations for France with newly implemented
recovery continue to a in place
price cuts, prescription controls, andbe focus on home care. The
transition to ITR is having a significant impact.
• Germany has abandoned the retroactive benefit assessments, but looks
to prolong price freezes, and there may be other non-AMNOG-related
reforms.
• UK’s VBP pushed towards the end of the year
•
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5. 4. Secondary emerging markets
are expanding healthcare insurance
The Philippines continues to be a fast-growing market, and a law
introducing universal health was enacted by President Aquino in June
2013.
• Indonesia's universal healthcare coverage was launched on 1 January
1. The foundations for economic
recovery coverage be in years
2014 with a goal of 100%continue toin five place for the world's fourth
most populous country. The universal healthcare system, Jaminan
Kesehatan Nasional (JKN), will transform Indonesia from a primarily selfpaid market to an insurance-driven healthcare market.
• Markets such as Nigeria, UAE and Qatar are also expanding their
insurance coverage.
•
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6. 5. Reimbursement continues to offer a mixed picture
1. The foundations for economic
recovery continue to be in place
IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

7. 6. Patent expirations continue to be a significant driver,
but it is a comparatively quiet year
2014 will be a comparatively quiet year among patent expirations
following the turbulent 2011-2013 period.
• The patents to expire include drugs such as Temodar, Evista, Avelox,
Nasonex, and Nexium.foundations for economic
1. The
recovery continue
• In the biosimilars space, there areto be in place negative drivers with
more potential
challenges to Herceptin, Lantus and Rituxan in Europe.
•
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8. 7. IRP baskets continue to evolve
Portugal has already changed its basket and there could be changes in
Turkey.
• Increasing fears that prices in New Zealand and South Korea could trickle
into much more1. The foundations for economic
important markets.
recovery continue to be in place
• Price harmonisation efforts in GCC (collective procurement starting 2014)
and Baltics.
• Colombia is launching its new reference pricing system which will target
patented and generic drugs, whilst Mexico is looking at international
reference pricing in 2014 during next round of negotiations.
•
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9. 8. Drug shortages will continue, but clampdowns
on parallel exports are seen in many countries
Drug shortages will increase due to parallel export—with several
countries (Greece, Czech Republic, Slovakia and Romania, among others)
banning exports of certain drugs.
• Italy and Bulgaria are also looking to curb parallel exports. Poland has
1. The foundations for economic
recovery continue growing concern.
highlighted the issue as an area ofto be in place
• Whilst parallel trade continues to be a significant negative driver,
governments are beginning to realize the negative consequences on a
stable supply of essential pharmaceuticals
•
IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

10. 9. Price cuts in Japan – but some incentives for innovation
The government has concluded that the average price cut rate in April
2014 will be 5.7%—excluding the impact of a sales tax hike.
• However, Japan remains one of the few major markets where there are
constructive discussions around increasing the reward for innovation.
1. The foundations for economic
recovery
• The country is continuingcontinue to be in place exempting innovative
its pilot programme of
products which fulfil certain criteria from the price cuts – although it
backed down from its December 2013 proposal to turn the pilot
programme into a permanent fixture on the market.
•
IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

11. 10. New technology developments
At the tail-end of 2013, the FDA approved Gilead’s Sovaldi (sofosbuvir),
the first approval of an all-oral, interferon-free combination therapy in
hepatitis C. Whilst J&J’s NS3/4A protease inhibitor Olysio was approved
the month before,The foundations for very much sets the tone for the
1. Sovaldi’s approval economic
new drug catalysts in 2014, and it to thein place new drug launch that the
recovery continue is be biggest
industry has seen for some time.
• 2014 is generally felt to be a transformational year for immunotherapies
and drugs targeting PD-1. Two therapies are in the final stages of
development here: Bristol-Myers Squibb’s (BMS, US) nivolumab and
Merck & Co’s MK-3475.
•
IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

12. Recent Multi-Client Studies
•
Flexible Pricing Strategies: Maximizing Value across the Pharmaceutical Product Lifecycle
•
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Conditions
•
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•
Drug Price Erosion: SafeguardingfoundationsAssets Against Value Attrition
1. The Pharmaceutical for economic
•
recovery continue to be the New Global Pharmaceutical Pricing Paradigm
International Reference Pricing: A Strategic Guidebook toin place
•
Biosimilars and Non-Innovator Biologics in Emerging Markets: Payer, Regulator, and Pharma Strategies
•
European Pharmacovigilance Reform: Implications for Market Access Strategies
•
Payer-Industry Partnerships in the Emerging Markets: Best Practices for Successful Market Access of New
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•
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Optimising Medical Device & Diagnostic Launches: A Country-Specific Analysis
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IHS Healthcare and Pharma Key Industry Drivers for 2014 I Copyright © 2014 IHS

13. Learn more
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1. The foundations for economic
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recovery continue to be in place
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14. IHS Healthcare and Pharma
Contact us
Gustav Ando
Director
Healthcare and Pharma
Gustav.Ando@IHS.com