BMI View: Robust US pharmaceutical market growth is due to the rising prevalence of chronic diseases, the introduction of new products with improved efficacy and safety profiles, and sustained medicine price rises. The country is unique among developed states as there are very few market access barriers and single payers have yet to exert meaningful influence. Direct-to-consumer advertising of pharmaceuticals is another uncommon market characteristic that supports demand.
Headline Expenditure Projections
Pharmaceuticals : USD371.2bn in 2014 to USD391.6bn in 2015; +5.5% growth. Market size revised upwards since Q 3 15 due to positive market developments .
Healthcare : USD3,006.4bn in 2014 to USD3,121.0bn in 2015; +3.8% growth. Forecast revised downwards due to macroeconomic factors .
The US has a Pharmaceutical RRI score of 82.9 out of 100 for Q415. This is unchanged from Q315, an increase from the 81.7 in Q215, and an increase from the 80.5 recorded in Q115.The high RRI score recorded by the US underlines the pharmaceutical market's unassailable status as the most lucrative globally. This is due to unparalleled healthcare access, considerable spending power, a high burden of disease, minimal market access barriers and intense company activity. The key risks to this positive outlook are the increasing influence of pharmacy benefit managers and greater regulation, such as the Branded Prescription Drug Fee.
Key Trends And Developments
The FDA approved the first 3D-printed drug product. Aprecia Pharmaceuticals' Spritam (levetiracetam) is indicated for oral use as a prescription adjunctive therapy in the treatment of partial onset seizures, myoclonic seizures and primary generalised tonic-clonic seizures in adults and children with epilepsy. Spritam utilises Aprecia's proprietary ZipDose Technology platform, which uses 3D printing to produce a porous formulation that rapidly disintegrates with a sip of liquid.
Shire confirmed that it made a proposal to Baxalta in July, to combine the companies in an all-stock transaction pursuant to which Baxalta shareholders would receive, for each Baxalta share, 0.1687 Shire ADRs. The proposal implies a value of USD45.23 per Baxalta share and represents a premium of 36% over Baxalta's stock price as of August 3 2015, with a total enterprise value of USD33.9bn. Baxalta reportedly declined to engage in substantive discussions regarding the proposal.
France-based drugmaker Sanofi introduced a 'Surprise, it's insulin' direct-to-consumer campaign for its inhaled insulin product Afrezza, in a bid to enhance its sales after a disappointing launch of the product. Afrezza is a mealtime insulin developed by US-based health firm Mannkind and is the only inhalable insulin on the market.
The FDA has reported that it anticipates receiving five 351(k) biosimilar applications annually in a notice submitted to the Federal Register of data collection filed with the Office of Management and Budget (OMB). Section 351(k) is an amendment to the Public Health Services (PSH) Act introduced through the Biologics Price Competition and Innovation (BPCI) Act; it creates the regulatory pathway for biosimilar applications.
Baxalta was launched as a global biopharmaceutical company dedicated to delivering transformative therapies to patients with orphan diseases and underserved conditions. The company continues to advance its well-established leadership position in haematology and immunology and seeks to expand its oncology portfolio for patients with limited treatment options. Baxalta was spun out of Baxter International.
The leading multinational drugmakers recorded average sales growth of 4.5% in the US during Q115. AbbVie (+19.0%) was the fastest growing firm, followed by Merck (+16.2%), Bristol Myers-Squibb (+15.8%) and Amgen (+14.7%). With the exception of Eisai, all of the companies that posted contractions in US revenues - Merck Serono, AstraZeneca, Novartis and GlaxoSmithKline - are European companies.
BMI Economic View
Continued gains in the labour market and high consumer confidence will see private consumption in the US pick up in the coming quarters, boosting headline growth. We forecast real GDP growth of 2.5% in 2015, increasing slightly to 2.6% in 2016. Moreover, growth will average around 2.5% over the next 10 years, a significant improvement from the 1.6% average seen over the past decade.
BMI Political View
With the 2016 presidential field beginning to take shape, we expect US citizen's concerns regarding the state of the economy, income inequality, and foreign policy to take centre stage. Demographic changes to the electoral map will provide modest tailwinds to the Democratic Party, while dissatisfaction with many aspects of President Obama's presidency will help Republicans.