(Reuters) NEW YORK | Wed May 18, 2011 10:29am EDT - Global sales growth of prescription drugs could be cut in half over the next five years as lucrative brands lose patent protection and cheaper generics and emerging markets become the only significant growth drivers, according to a study by IMS Health.

"Past patterns of spending offer few clues about the level of expected growth through 2015," said Murray Aitken, an IMS Health executive whose division conducted the study.

"There are unprecedented dynamics at play, which are driving rapid shifts in the mix of spending by patients and payers between branded products and generics," said Aitken, whose company tracks prescription drug sales and trends.

Average annual sales are expected to grow 3% to 6% during the period, reaching nearly $1.1 trillion by 2015. But the trend reflects a slowdown from the annual growth of 6.2% seen during the past five years, the report said.

U.S. sales will grow only 0% to 3% a year over the period, while sales in Europe will rise 1% to 4%. Spending on branded drugs is expected to be little changed in such developed markets in 2015, with growth coming instead from higher demand for cheaper generics.

A wave of new generics is approaching, as an unprecedented number of big drugs lose U.S. patent protection by 2015, including Pfizer's $10 billion-a-year cholesterol fighter Lipitor, Bristol-Myers Squibb's Plavix blood clot preventer and Eli Lilly's Zyprexa for schizophrenia.

Aitken said too few novel drugs are being approved to greatly offset lost sales of those facing the generic onslaught.

"We continue to be disappointed by the number of new chemical entities and biologics entering the market," he said.

All told, cheaper generic formulations of the maturing drugs will produce $98 billion in net savings to insurers in developed countries through 2015.

"The U.S. share of global spending will decline from 41% in 2005 to 31% in 2015, while the share of spending from the top five European countries will decline from 20% to 13%," the report said.

Meanwhile, it said spending will likely double over the next five years in emerging markets, to between $285 million and $315 million a year -- approaching U.S. levels.

"Seventeen high-growth emerging markets, led by China, will contribute 28% of total spending by 2015, up from only 12% in 2005," the report said. It noted that growth will come primarily from generics.

Global spending on cancer drugs is expected to reach $75 billion by 2015, rising at a much slower rate than in the past five years because many newer and costly biotech treatments are already being widely used in developed markets.

But annual spending on diabetes medicines is expected to grow 4% to 7% through 2015, due largely to changing diets and lifestyles in developing countries that will increase the prevalence of Type II diabetes.

© 2010 Thomson Reuters. Click for Restrictions.

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