Global market expected to drive cancer drug growth

China, Brazil, Russia and other emerging countries are becoming bigger customers for pharmaceuticals as they invest more in treating and diagnosing cancer, according to a report issued Thursday by IMS Health.

The health care research firm expects pharmaceutical spending in countries such as India, Mexico and Turkey to grow by 12 to 13 percent over the next 15 years, compared with single-digit growth for more developed nations.

Cancer drug spending is expected to grow between 12 and 15 percent annually through 2012 to $75 to 80 billion, according the report. The overall drug market is expected to grow at 6.4 percent.

Feeding that demand are the multibillion-dollar research and development budgets of firms like Genentech Inc., Amgen Inc. and Novartis AG.

"Oncology is the top of the bill when it comes to new products in development," said Titus Pattel, a vice president with IMS. "Oncology R&D dwarfs all other research efforts within these organizations."

Cancer drug sales are expected to reach $48 billion this year, led by Genentech's breast cancer drug Herceptin, Novartis' leukemia drug Gleevec and other blockbusters.

But the market is not immune to a slowdown. Expiring patents on older cancer drugs and efforts to tighten health care spending could limit future growth, according to IMS.

Some European countries have begun paying drug companies based on how successfully their drugs treat patients. The Italian government, for example, only began reimbursing Johnson & Johnson for the cancer treatment Velcade after the drug demonstrated positive results in patients. IMS said that the adoption of similar policies in the U.S. it could slow spending on cancer medications.

Pharmaceutical firms also face a tougher regulatory environment in the U.S., where the Food and Drug Administration has delayed several highly anticipated cancer therapies.

Last year, the agency denied approval of Dendreon's prostate cancer vaccine Provenge, despite an overwhelmingly positive review by the agency's outside advisers.

"There's a tendency from the FDA to be more conservative than they have over the last 10 years," Pattel said.

An aggressive review environment could dampen the market for between 25 and 30 new anticancer drugs currently in development, the IMS report says. At the same time, some of the biggest blockbuster cancer drugs of the last decade will lose their patent protection, including Sanofi-Aventis' Taxotere and AstraZeneca PLC's Arimidex.

Expiring drug patents and an increasingly crowded market for cancer therapies will lower spending in the U.S. and Europe. These markets are expected to account for 65 percent of the global cancer drugs market by 2012, down from 71 percent last year, according to IMS.

The company's forecast comes ahead of the American Society of Clinical Oncology's annual meeting, which begins May 30. Abstracts for company studies will be released online Thursday night, giving researchers and investors a preview of clinical results for experimental drugs.