IMS Reports 11.8 Percent Dollar Growth in 2002 U.S. Prescription Sales.

Business/Health & Science Editors

FAIRFIELD, Conn.--(BUSINESS WIRE)--Feb. 21, 2003

Growth Returns to More Historic Levels, with Fewer New Product

Launches and Increased Use of Lower-Priced Generic Products

IMS HEALTH (NYSE: RX) today reported that U.S. prescription drug sales grew 11.8 percent to $192.2 billion in 2002, compared with $172 billion in sales the previous year. Prescription product sales data are derived from the IMS Retail and Provider Perspective(TM) service and reflect wholesale prices. IMS is the world's leading provider of information solutions to the pharmaceutical and healthcare industries.

"If you examine pharmaceutical trends over the past decade, 2002's growth showed a return to more historic levels," said Paul Wilson, vice president, IMS Statistical Services. "The slowdown in dollar growth last year was fueled primarily by the generic erosion of some blockbuster drugs losing patent protection, the fewest number of new molecular entities approved by the FDA since 1983, and rising patient co-payments. However, growth is still relatively strong due to continued favorable demographics and growing demand for a broad range of branded products."

Despite the decline in the number of new products in 2002, Wilson noted, there were some promising new therapies launched, including a new treatment for chemotherapy-induced neutropenia (Neulasta from Amgen), a serious and common side effect of cancer treatment, and a new treatment for relapsing forms of multiple sclerosis (Rebif from Serono and co-promoted by Pfizer).

U.S. Prescription Distribution Channels

Retail pharmacies (chains, independents, food stores, mass merchandisers) remained the primary distribution channel for U.S. prescription drugs in 2002, capturing 61.7 percent total market share. Mail service sales remained the fastest-growing retail sector last year, rising 20.6 percent and capturing 12.9 percent market share.

Clinics were the fastest-growing non-retail channel last year, with more than 18 percent growth over 2001. Long-term care and federal facilities each grew by at least 16 percent, with respective market shares at 3.4 percent and 1.8 percent.

"High growth in the mail services channel reflected the ongoing influence of managed care and pharmaceutical benefit managers on dispensing locations via differential co-pays," said Wilson.

U.S. Prescription Market Share by Distribution Channel, 2002

Wholesale Prices, Sales Include Prescription Products Only

Source: IMS Retail and Provider Perspective(TM), 1/2003

                            2002 Sales   Percent Growth  Market Share
                           (US$ Billions)  Year-Over-      In 2002
                                              Year
                           -------------  -------------   ------------
 1 Chain Stores                56.1           8.8           29.2
 2 Independents                31.3           9.3           16.3
 3 Mail Service                24.8          20.6           12.9
 4 Non-Federal Hospitals       18.5           6.9            9.6
 5 Food Stores                 17.4          11.1            9.0
 6 Clinics                     16.0          18.3            8.3
 7 Mass Merchandisers          13.8          14.7            7.2
 8 Long-Term Care               6.6          16.9            3.4
 9 Federal Facilities           3.4          16.0            1.8
10 Home Health Care             2.1          11.6            1.1
11 HMO (Staff Model)            1.4          -1.0            0.8
12 Miscellaneous                0.8          14.2            0.4
   Total                      192.2          11.8            100

Note: Results for the Mail Service channel have not been projected.

Leading U.S. Therapy Classes

The top 10 therapy classes accounted for 36.3 percent of total U.S. prescription sales in 2002 and grew 11.9 percent over the prior year, as measured by U.S. dollars. Six of the top 10 classes experienced double-digit growth.

The top five classes remained in the same position as 2001. Cholesterol-reducing statins were first with sales of $12.5 billion and 6.5 percent total market share. Sales in the seizure disorders class grew fastest among the top 10 therapy classes, with 22.7 percent growth in 2002, yielding a sales volume of $5.5 billion.

Existing branded products drove most of the growth in these therapeutic areas with generic penetration lowering the growth in some of these classes. For example, the full-year impact of generic fluoxetine (Prozac) impacted the SSRI/SNRI category.

"While the growth wasn't as strong as the previous year, there is still substantial dollar growth among most of the Top 10 categories," said Doug Long, vice president of IMS Industry Relations. "SSRI/SNRI and Ace Inhibitor dollar growth was eroded by generic entries, and the COX-2 market has been hurt by adverse publicity."

Top 10 Therapeutic Classes by U.S. Prescription Sales, 2002

Wholesale Prices, Sales Include Prescription Products

Only, Insulin Products Included

Source: IMS Retail and Provider Perspective(TM), 1/2003

                                     2002 Sales       Percent Growth
                                   (US$ Billions)     Year-Over-Year
                                   --------------     ---------------
   1 Cholesterol Reducers               12.5                12.9
   2 Proton Pump Inhibitors             11.9                18.2
   3 SSRI/SNRI                           9.9                 2.3
   4 Antipsychotics                      6.4                21.8
   5 Erythropoietins                     6.2                22.0
   6 Seizure Disorders                   5.5                22.7
   7 COX-2 Inhibitors                    4.9                 6.6
   8 Antihistamines                      4.8                13.4
   9 Calcium Blockers                    4.4                -2.9
  10 Ace Inhibitors                      3.7                -0.5
     Total                              70.2                11.9

Leading U.S. Prescription Products

Pfizer's Lipitor, a cholesterol reducer, remained the leading U.S. prescription drug in 2002, with sales of $6.1 billion and 18.6 percent year-over-year growth. Merck's Zocor - another cholesterol reducer - rose from third place a year ago into second place, with $4.2 billion, while TAP's GI product, Prevacid, moved into third position. AstraZeneca's Prilosec fell from No. 2 in 2001 to No. 4 last year with sales down 21.8 percent, a result of its generic introduction in late 2002 and the conversion to Nexium. Sales of Pharmacia's antiarthritic and pain medication, Celebrex, slipped from fifth to eighth this year amid lingering concerns about side effects and the introduction of Bextra, a new COX-2 also launched by Pharmacia.

Procrit, the hemotologic from Ortho Biotech, continued to do well, recording the highest increase in growth among the top 10 products for the second year in a row. Zyprexa, Lilly's psychotherapeutic, also delivered high growth at 17.0 percent moving up to No. 6 with $2.9 billion in sales.

Wilson noted that despite the introduction of generic fluoxetine the sales of Paxil and Zoloft, also SSRI/SNRIs, grew by more than 10 percent, showing that managed care continued to allow patients a range of therapeutic options in this class.

Top 10 U.S. Prescription Products by Sales, 2002

Wholesale Prices, Sales Include Prescription Products

Only, Insulin Products Included

Source: IMS Retail and Provider Perspective(TM), 1/2003

                                 2002 Sales           Percent Growth
                               (US$ Billions)         Year-Over-Year
                               --------------         --------------
   1 Lipitor (R)                    6.1                    18.6
   2 Zocor (R)                      4.2                    15.5
   3 Prevacid(R)                    3.7                     4.9
   4 Prilosec (R)                   3.5                   -21.8
   5 Procrit  (R)                   3.1                    21.7
   6 Zyprexa (R)                    2.9                    17.0
   7 Epogen (R)                     2.8                    11.8
   8 Celebrex (R)                   2.6                     2.1
   9 Zoloft (R)                     2.5                    14.2
  10 Paxil (R)                      2.3                    10.7
     Total                         33.7                     8.2

Largest Pharmaceutical Companies by U.S. Sales

The top two pharmaceutical companies in 2002 remained consistent over prior-year. Pfizer, the leading pharmaceutical company in 2002 as measured by prescription sales, experienced 12.8 percent growth and $19.5 billion in sales. GlaxoSmithKline, No. 2, had sales of $17.3 billion with 10.8 percent growth over 2001.

According to Wilson, most of Pfizer's growth resulted from strong demand for its existing products, whereas GlaxoSmithKline also benefited from the first full year sales of Advair, an asthma product that has shown strong growth since its launch in 2001.

Of the top 10 companies, Novartis, No. 7, had the highest growth last year at 19.4 percent, assisted by new product launches in the dermatology and attention deficit markets. Merck slipped to No. 4 with $12.7 billion in sales, only a 4.5 percent increase over prior-year. AstraZeneca rounded out the top five in 2002 at $10.9 billion.

The 10 largest pharmaceutical companies, as measured by U.S. prescription product sales, accounted for more than half of total U.S. prescription sales in 2002, with a market share of 57.6 percent.

Top 10 Pharmaceutical Companies by U.S. Prescription Sales, 2002

Wholesale Prices, Sales Include Prescription Products

Only, Insulin Products Included

Source: IMS Retail and Provider Perspective(TM), 1/2003

                                  2002 Sales           Percent Growth
                                (US$ Billions)         Year-Over-Year
                                --------------         --------------
 1 Pfizer                            19.5                  12.8
 2 GlaxoSmithKline                   17.3                  10.8
 3 Johnson & Johnson                 12.7                  18.9
 4 Merck and Co.                     12.7                   4.5
 5 AstraZeneca                       10.9                  10.6
 6 Bristol-Myers Squibb               8.8                 -13.2
 7 Novartis                           8.0                  19.4
 8 Wyeth                              7.4                   7.8
 9 Pharmacia                          7.2                  12.8
10 Lilly                              6.7                 -10.2
   Total                            111.2                   7.8

About IMS

Operating in more than 100 countries, IMS is the world's leading provider of information solutions to the pharmaceutical and healthcare industries. With $1.4 billion in 2002 revenue and nearly 50 years of industry experience, IMS offers leading-edge business intelligence products and services that are integral to clients' day-to-day operations, including marketing effectiveness solutions for prescription and over-the-counter pharmaceutical products; sales optimization solutions to increase pharmaceutical sales force productivity; and consulting and customized services that turn information into actionable insights. Additional information is available at http://www.imshealth.com.