Swedish Human Pharmaceutical Sales Grow 4% Y/Y to US$3.3 bil., Generics Underperform Overall Market

Swedish sales of pharmaceuticals for human use have grown 4% year-on-year (y/y) to 28.82 billion Swedish kronor (US$3.29 billion) in 2008, according to fresh figures from the Swedish Association of the Pharmaceutical Industry (Lif). In the meantime, sales of generics have grown at half the overall market rate (2% y/y) to 4.12 billion kronor while sales of parallel imported medicines were nearly flat (+0.3% y/y) at 3.25 billion kronor. Parallel imports account for 11.1% of the Swedish pharmaceutical market at wholesale prices. In 2008, per capita spending on pharmaceuticals was up 3.3% y/y to 3,727 kronor.

In 2008, prescription drugs accounted for 90% of the total market for human use while over-the-counter (OTC) medicines accounted for 9% of that market, according to Lif. Sales of OTC medicines, inclusive of veterinary sales, amounted to 2.46 billion kronor in 2008, down from 2.61 billion kronor in 2007. Lif estimates that veterinary sales of OTC medicines amounted to about 0.4% (10 million kronor) of the total OTC sales in 2008.

Market growth was fuelled by sales of antineoplastics and immunosuppressant agents, and central nervous system (CNS) drugs whose sales reached 5.3 and 5.1 billion kronor respectively, corresponding to a respective market share of 18.6% and 17.9%. Alimentary tract and metabolism treatments were next in line with sales growing 9.8% y/y to 2.8 billion kronor.

By best-selling drugs, Sweden's top-10 remains in line with 2007, although 2008 marks the entry of breast cancer drug Herceptin (trastuzumab; Roche, Switzerland) in the league table. In line with other Western European countries, disease-modifying antirheumatic drugs (DMARDs) featured high on the list of best-selling medicines by turnover with Enbrel (etanercept; Amgen, U.S.), Remicade (infliximab; Schering-Plough, U.S.) and Humira (adalimumab; Abbott Laboratories, U.S.) leading the way with respective sales of 676, 450 and 417 million kronor. Sales of the country's top-15 medicines amounted to 17% of the total market by value in 2008.

In 2008, prices of primary care pharmaceuticals for human use fell by an average of 1.68% y/y. More specifically, prices of prescription drugs fell by 2.03% y/y while prices of OTC medicines rose by 1.87% y/y.

Outlook and Implications

The Swedish pharmaceutical market has seen its growth stalled substantially over the last year as in 2007, the market had grown 6.8% y/y. In 2008, growth was hampered by low volume growth and lower overall pharmaceutical prices. Nonetheless, the market grew faster by value than by volume, illustrating a consumption shift towards more expensive medicines. With the ageing of the population, the demand for cancer treatments and immunomodulating agents is expected to increase, which will keep boosting the market by value.

Interestingly, sales of generic medicines and parallel imports have stalled by value. In 2007, value sales of generic medicines had grown by 11.6% y/y, well ahead of the overall market. However, by volume, sales of generics grew 7% y/y in 2008, illustrating the downward price pressure on generics and the use of increasingly cheaper alternatives. Generic substitution at the pharmacy level has been mandatory in Sweden since 2002 and the anticipated wave of patent expiry on blockbusters is expected to jump start the generic market again after the turn of the decade.