Among the developed markets ofJapan France Germany Italy the U

Among the developed markets ofJapan, France, Germany, Italy, the U.K., Spain and Canada, their CAGR over thenext five years will be 1-4 percent .Each market reflects a unique set ofmechanisms to manage healthcare access and costs, including a growing emphasison regional decision making, promotion of generic drug usage, and pricereductions.* Many innovative treatments expected to be launched will be aimed at narrowpatient populations. The pharmergingmarkets also will experience some volatility due to the economy, and localresponses will vary * Mature markets will contribute lower growth. China, which is currently the sixth-largestpharmaceutical market, will become the third largest by 2011. The seven pharmerging markets will contributemore than half of global market growth in 2009 and sustain an average 40 percentcontribution through 2013. * A new world order is apparent as pharmerging markets grow collectively at a 13- 16 percent pace through 2013. As the cost of medication shifts increasingly topatients, consumers are being forced to make difficult decisions about startingor continuing treatment.

Federal policies may bolster demand for medicines overthe forecast period, but the expiration of several blockbusters in 2011 willimpact growth to the end of the forecast period in 2013. Whilegrowth will return during parts of the forecast period, the overall five-yearCAGR will be essentially flat. In aggregate, expectations for 2009 economic growth in the 15 keydeveloped and emerging countries have declined by 3.4 percentage points sinceIMS`s October 2008 Market Prognosis Report -- driving most of the two percentagepoint decline in the 2009 forecast since that time.* The U.S pharmaceutical market is expected to contract in 2009 Pharmaceuticalsales in the U.S will decline by 1 - 2 percent in 2009, a historic low. The extent of theeconomic impact on each pharmaceutical market is influenced by the healthcarecost burden borne by patients, and the short- and long-term policy responsesthat governments implement.

Countries where patients directly pay a high portionof their drug costs -- such as China, Brazil and the U.S. -- already are seeingthe impact of changing consumer spending behavior. In more publicly fundedmarkets including Turkey, Japan and France, policy responses may differ -- fromstimulus programs that can have an indirect positive impact on pharmaceuticalmarket growth, to the imposition of price cuts in response to budgetaryconstraints. In its latest analysis, IMS identifies the following key market dynamics:* Economic conditions affect markets to varying degrees. The global compound annual growth rate (CAGR) forpharmaceutical market growth is forecast to be 3 - 6 percent through 2013. We see the worldwidefinancial crisis contributing to record-low sales growth this year.

Thepharmaceutical industry is not recession-proof, but it is insulated to a greaterextent than other industries where spending is more discretionary." While the pharmaceutical market is expected to rebound as the global economyrecovers, an unprecedented level of potential patent expirations in 2011 and2012 will curb sales growth. "There is a clearcorrelation between demand for medicines and key macroeconomic variables such asGDP, consumer spending and government expenditures. The conclusions aredrawn from the latest release of IMS Market Prognosis, a series of strategicmarket forecasting publications that incorporate updated macroeconomicindicators provided by the Economist Intelligence Unit. "To the now-familiar factors impeding market growth such as patent expirations,a slowdown in innovative product launches, and hurdles imposed by payers onmarket access and acceptance, we can now overlay the economic downturn," saidMurray Aitken, senior vice president, Healthcare Insight, IMS. The sector will feel theimpact of the economic climate -- but to a lesser extent than many otherindustries -- through 2010, when a rebound is expected. The updatedforecast predicts global pharmaceutical sales exceeding $750 billion for theyear, down from the $820+ billion forecast in October 2008, reflecting both thelower growth rate and currency exchange fluctuations.