If Only All Business Was This Recession-Proof Sector
Is it too late to quit the ad game and become a pharmacist? So you might ask yourself as you digest the data from a new report by IMS Health. While the rest of the economy was going to seed, sales of prescription drugs rose last year by 11.8 percent, to $192 billion from $172 billion in 2001. (The figures are based on wholesale prices.)
That actually represents a slowdown in the growth rate, the research firm notes, due to a relative paucity of product launches and "generic erosion" of some major drugs whose patents lapsed. A trend toward higher co-payments by patients also tended to hold down growth in prescription sales. However, such factors can't fully offset what IMS delicately calls the "continued favorable demographics" for drug companies—i.e., the fact that the U.S. has more and more old folks who need more and more such drugs.
Cholesterol reducers remained the largest "therapy class" in the prescription market, accounting for $12.5 billion in sales. Pfizer's Lipitor and Merck's Zocor—both cholesterol reducers—were the top drugs overall. Among distribution channels, mail-service sales had the strongest growth. That sector's revenues grew by 20.6 percent, giving it 12.9 percent of the market. Retail pharmacies (including chains, independents, food stores and mass merchandisers) still have the biggest chunk of the business, with a 61.7 percent share.