Tuesday, June 18, 2019

Meet the Top Ten Drugs of 2024 (Maybe)

The professional prognosticator EvaluatePharma recently released its World Preview 2019, Outlook to 2024 report, which projects prescription drug sales and R&D activity in the U.S. and abroad. (The report is free with site registration.)

You’ll find predictions for the ten best-selling U.S. drug products on page 24. Below is my handy summary chart comparing the 2024 list along with each product’s 2018 sales. For fun, I have also compared the 2018 actual sales with EvaluatePharma’s projections from 2013.

The figures should make us all humble about our ability to project the future. For many products, the EvaluatePharma figures sharply underestimated actual growth rates from 2013 to 2018. The projections to 2024 show that growth will accelerate, which to me suggests an overestimation of future growth. Notably, EvaluatePharma predicts that Humira will retain its sales lead, despite forthcoming biosimilar competition.

These projections, while useful, remind us of another valuable lesson: Good forecasters may not be smarter than everyone else—they merely have their ignorance better organized.

HELLO THERE

Here’s a summary of the top ten best-selling drugs for 2024 as reported in the EvaluatePharma report, on its page 24. I also include the 2018 actual revenues and EvaluatePharma’s 2018 projections (from 2013). From what I can tell, the EvaluatePharma figures reflect either company reported sales or an average of equity analyst estimates.

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Here are some observations and questions on these projections:
  • Expect big spending increases for some products. Five of the ten products are expected to grow at double-digit rates. Given today’s pricing environment, I expect that a mix of pricing and utilization will drive this growth, though EvaluatePharma doesn’t provide data on the relative contribution of price vs. utilization. As I note in Which PBM Best Managed Drug Spending in 2018?, higher utilization—not drug costs—was the biggest factor driving specialty spending growth.
  • Will Humira’s reign continue? EvaluatePharma projects that Humira will remain the best-selling drug in the U.S., but that its sales will decline by $3.1 billion over the next five years. The 2024 forecast is more than $1 billion below that of the previous year’s 2024 forecast, but it still seems overly optimistic to me.

    AbbVie has announced settlements that will permit five biosimilars to launch during 2023. Here’s the schedule per Endpoints:
    • Amgen: January 31, 2023
    • Samsung Bioepis and Merck: June 30, 2023
    • Boehringer Ingelheim: July 21, 2023
    • Mylan: July 31, 2023
    • Sandoz: September 30, 2023

    Without interchangeability, PBMs and prescribers will control access and product selection. (See Section 12.3. of our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.) PBMs, however, will drive significant formulary competition among the biosimilars, resulting in greater-than-forecast net sales declines for the Humira brand-name product.
  • Two out of ten ain’t bad. Over the years on Drug Channels I have periodically reviewed EvaluatePharma forecasts. My analysis of their 2018 forecasts was published in 2013: Meet the Top Ten Drugs of 2018.

    As you can see, only two of the projected top ten drugs for 2018—Humira and Revlimid—appear in the top ten based on actual 2018 revenues. Actual revenues for those products turned out to be much higher than projected. Revenues for the other eight top sellers were also under forecast, by a collective $15.2 billion.
  • Will growth slow? In 2013, total manufacturer sales of individual products in EvaluatePharma’s database had been projected to grow at an average rate of 3.2% per year, to $296 billion by 2018. Actual sales grew at an average rate of 5.6% per year, to $340 billion in 2018. The higher-than-projected growth took place during a period when drug prices grew more quickly and healthcare coverage expanded, due largely to the Affordable Care Act.

    EvaluatePharma now projects an average annual sale growth rate of 8.3% from 2018 to 2024. This seems high to me. Price increases have slowed dramatically in the past few years, per Drug Prices Are NOT Skyrocketing—They’re Barely Growing at All.

    ICYMI, IQVIA revised its price increase figures since my January article was published. For 2018, net brand-name drug prices after rebates and discounts increased by only 0.3%.
2024’S TOP COMPANIES

The table below, which appears on page 11 of the report, shows 2024’s top companies ranked by worldwide sales. With only two exceptions, growth rates are expected to be in the low single digits or negative for the largest pharma companies.

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Global market share for the top ten companies is expected to shrink, from 41.7% in 2018 to 35.1% in 2024. As usual, EvaluatePharma wisely avoids predicting M&A transactions that would alter the rankings.

Forecaster beware: Reality will render its opinion soon enough.

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