Big Pharma (and Big Biotechs) riding drug approval surge toward $1T in sales

Print 19 June 2015
Eric Palmer / FeircePharma

The FDA approved a record 50 new drugs last year and 6 of those, coming from 6 different companies, are forecast to reach blockbuster sales in 2019. In fact, Bristol-Myers Squibb's ($BMY) breakout immuno-oncology drug Opdivo is forecast to hit nearly $4.3 billion in sales by then. According to a new big data dive by EvaluatePharma, those new products will help propel global prescription drugs sales to nearly $1 trillion by 2020 as the industry reaps the benefits of an upsurge in R&D productivity and breakout categories like cures for hepatitis C.

In fact, two of what EvaluatePharma considers the most valuable new drugs approved last year are hep C treatments. The other 5 drugs approved last year that the report says will have $1 billion or more in sales by 2019 are Gilead Sciences' ($GILD) hep C combo Harvoni, $3.855 billion; Merck's ($MRK) melanoma treatment Keytruda, $2.647 billion; AbbVie's ($ABBV) hep C comboViekira Pak, $1.286 billion; Celgene's new pill for autoimmune diseases Otezla, $1.138 billion and perhaps a surprise in Boehringer Ingelheim's Ofev, a treatment for idiopathic pulmonary fibrosis that is forecast to hit $1.085 billion in sales by 2019.

But EvaluatePharma's World Preview 2015 has some caveats to go with the promising news. It points out that pressure from payers in the U.S. led GlaxoSmithKline ($GSK) to trim sales forecasts in respiratory drugs and Sanofi ($SNY) to reel in forecasts for diabetes drug sales. The payer attack on Gilead's hep C drugs when a competing treatment became available also points to altered pricing reality for payers, it points out.

"All this has led some to ask if we are seeing the end of pricing freedom in the U.S." EvaluatePharma says. "If the industry is to keep up the impressive growth it has experienced over the last couple of years, and is predicted to have in the coming years, it will either have to accept lower prices for its products, or persuade those who hold the purse strings that its products are indeed real game changers and their benefits outweigh the cost of disease."

That said, sales of key prescription drugs were up 4.9% in 2014, powered by an 8.9% jump in U.S. sales and a return to grown, 2.4%, in Europe. However, the other major world market, Japan, one that has been seen as providing big promise, recorded a 2.6% decline when measured in yen. Still, the report predicts that excitement surrounding new products including Merck's Keytruda, Opdivo from BMS and the new non-statin PCSK9 cholesterol drugs from Sanofi and Amgen ($AMGN) should keep the sales momentum building. It predicts compound annual growth of 4.8% in the next 5 years with total global prescription drug sales to reach $987 billion by 2020.

That is despite the fact that an estimated $197 billion worth or drug sales are at risk from patent losses. But EvaluatePharma estimates only about $99 billion of that will actually be taken off the table, mainly because many of the potential losers are biologics and uncertainty about the biosimilars market will soften the patent cliff blow.

Even with all of the excitement around the new immuno-oncology drugs and the hep C breakthroughs, some things don't change, or at least not quickly. AbbVie's arthritis drug Humira, which is the leading seller in the U.S. with $8 billion in sales is expected to remain the top seller over the next 5 years. Celgene's ($CELG) Revlimid will trail that in second place with $6 billion.

And which companies will dominate in all of this? Pretty much the players we are used to seeing. The top 5 based on sales 2014-2020 will be Novartis ($NVS), Pfizer ($PFE), Roche ($RHHBY), Merck and Sanofi. In the bottom 5 there will be some new names. Johnson & Johnson ($JNJ) and GSK will be 6 and 7, while Actavis, which has taken on the Allergan ($AGN) name, will climb to eighth place ahead of AstraZeneca ($AZN). Biotech Gilead Sciences takes the number 10 spot, ahead of Big Pharma names like Bristol-Myers Squibb and Eli Lilly ($LLY).

"EvaluatePharma finds that Novartis will remain the number one pharmaceutical company through to 2020 with total prescription drug sales of $53.3b billion, representing a 5.4% share of the entire world market," the report says. "Actavis's prescription drug sales are forecast to almost triple between 2014 and 2020, primarily as a result of its acquisition of Allergan in March 2015."

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