Drug sales hampered by economy, free antibiotics

News
Article

The slumping U.S economy and government regulations will cause pharmacy sales to grow only around 1.3 percent rate in 2009, according to new research presented last week at the American Society for Automation in Pharmacy?s Industry and Technology Issues in St. Petersburg, Fla.

The slumping U.S economy and government regulations will cause pharmacy sales to grow only around 1.3 percent rate in 2009, according to new research presented last week at the American Society for Automation in Pharmacy’s Annual Conference on Industry and Technology Issues in St. Petersburg, Fla.

“2009 will be more of the same, until the economy starts to turn around a bit,” said Doug Long, vice president of industry relations for IMS Health in Norwalk, Ct. IMS’s “National Sales Perspective” data show that, as of September, 2008, U.S. pharmaceutical sales grew 1.3 percent to approximately $297 billion, compared to sales figures for September, 2007.

By the end of 2007, overall pharmaceutical sales had slowed to a growth rate of 3.7 percent, the slowest rate since 1961. Long expects the same low growth rate for 2009, because of several problems related to the poor economy. In addition, retailers’ “$4 generic programs” are eroding gross profit margins, a lower rate of FDA drug approvals is hurting the industry, and increased FDA safety requirements and warning labels are confusing patients.

The generic drug programs – such as free antibiotics or $4 for certain generics - have led to lower margins, particularly for grocery chains, according to Long. In fact, some are reevaluating their generic programs. “Having a pharmacy in the supermarket used to be a no-brainer, but now supermarkets are taking a second look at their value,” Long said.

While long-term-care facilities experienced a 4.9 percent growth in prescription volume as of September, 2008, grocery prescription volume dropped .1 percent and independent pharmacies experienced a .4 percent drop. Chain-store prescription volume grew 1.7 percent, while sales from mail order grew .7 percent.

Economic problems and higher health insurance co-pays are already leading patients to “make compromises,” Long said, including splitting pills and switching from prescription to over-the-counter drugs. Another factor hampering the growth of the industry is the slow pace of new FDA drug approvals, which Long attributes to problems with Vioxx and other products. “New product approvals remain low and new product launches are not delivering growth,” Long said.

By the end of 2007, the FDA had approved only 18 new pharmaceuticals, the lowest rate in a decade, according to Long. Also hindering growth is the number of “black-box warning” labels on pharmaceuticals. By the end of 2007, an estimated 73 products, including certain antidepressants, glitazones, and epoetins, displayed those labels on their packages.

Long did offer a bit of good news for the industry, including the growth of anti-psychotic and anti-seizure medications. Sales of anti-psychotic pharmaceuticals grew by 14 percent in 2008, oral anti-platelets sales increased 20.2 percent, sales of antiotensin II antagonists grew 15.2 percent, and sales of drugs for seizure disorders increased 14.3 percent.

By category, specialist-driven product sales had jumped 8.1 percent by September, 2008, compared to September, 2007. Biotech sales increased 3.1 percent during the same period. “Growth is strong in classes not impacted by patient expiration or safety,” Long said. While the increase in the aging population typically would bode well for the pharmaceutical industry, several factors are expected to keep sales low this year.

“Because of increased generics competition, the impact of economic conditions on demand, and the increase of safety surveillance and incidents, 2009 is going to be similar to 2008,” Long said.

Related Videos
fake news misinformation | Image Credit: Bits and Splits - stock.adobe.com
Dr. Charles Lee
Dr. Charles Lee
Related Content
© 2024 MJH Life Sciences

All rights reserved.