Bullish on Biologics

Biologics cover a wide range of pharmaceuticals. According to the glossary at the Duke Clinical Research Institute, a biologic is a “virus, serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or other similar product used to prevent, treat or cure disease or injury.” The breadth of this category of therapeutics explains, in part, its influence on the pharmaceutical market.

According to data from IMS Health (shown here as the column-and-line graph), the annual sales of biologics climbed relatively consistently from around $30 billion in 1999 to more than $138 billion in 2010. That represents growth of about 4.5 times over a little more than a decade. Despite the increase in sales, the global growth of biologics sales decreased from 2000 to 2010, but stayed higher than the rate of total global pharma growth throughout that period. Consequently, these data illustrate that biologics make up a substantial part of today’s pharmaceutical market, and promise to contribute even more to markets in the future.

To zoom in on the global market, we provide pie charts of IMS Health data that show sales and growth by country. Starting with sales, the U.S. accounted for 50 percent of global 2010 revenues, which equals nearly $70 billion. Other countries accounted for far smaller percentages of last year’s global biologics sales. For example, Japan, France and Germany provided 8, 6 and 7 percent of the sales, respectively. Even some very large countries did not account for much of the 2010 biologics sales. China and Russia, for instance,  only reaped 2 and 1 percent, respectively, of global sales. The expense of certain biologics and the lack of adequate payer systems probably impact the sales in some countries, so that even a nation with a large population might not post high sales figures.

The growth of sales for biologics in 2010—$11.1 billion—largely mirrors the overall sales themselves. For example, the U.S. accounted for most of the growth, at 47 percent. For most of the other countries, sales figures nearly match their impact on global growth. In China, however, its contribution to the growth of biologics sales in 2010 of 5 percent is more than two times higher than its portion of the sales themselves. This might suggest that the biologics market in China is poised have a significant impact on the global market.

Other datasets point out the increasing influence of biologics. For example, Evaluate Pharma suggests that by 2014 the biggest-selling medicines will be biologics. Evaluate Pharma’s analysis indicates that Roche’s biologic Avastin, for instance, will replace Pfizer’s Lipitor as the top-selling drug. Nonetheless, recent regulatory issues related to the use of Avastin for some indications could slow its growth. The market, however, is likely to get a boost as more countries develop regulations for biosimilars, or generic versions of biologics.

Overall, developing new biologic drugs and expanding the availability of biosimilars will drive this market segment even higher in the next few years.