TABLE OF CONTENTS

CHAPTER 1: EXECUTIVE SUMMARY 3
Objective of the analysis 3
Datamonitor insight into the antibacterials market 3

CHAPTER 2: MARKET DEFINITION AND OVERVIEW 14
Market definition for this report 14
ATC classes covered 14
Classification of pathogens and sites of infection 16
Gram staining 16
Bacterial growth conditions 17
Site of infection 17
Hospital and community market 18
Current market situation 19
Although highly mature, the antibacterial market is still growing 19
Four classes dominate the antibacterial market 20
Penicillins 20
Cephalosporins 21
Fluoroquinolones 23
Macrolides and ketolides 23
The antibacterial market is highly segmented 24
Several blockbusters share the market lead 25
Cephalosporins are ahead in terms of sales 27
Penicillins remain the most widely used class 29
Most large pharma companies are active in the antibacterial market 31
The antibacterial market is highly genericized 32
Although the community market is still dominant, the hospital market is gaining in importance 35
The US continues to be the biggest market for antibacterials 38
Key unmet needs lie in the treatment of infections caused by MRSA and gram-negative pathogens 39
Strategic scoping and focus 40

CHAPTER 3: COUNTRY MARKET ASSESSMENTS 42
Global opportunities and threats 42
Opportunities 42
Increasing age of the population and higher likelihood of bacterial infections among the elderly will expand the antibacterial market 42
The increasing number of immunocompromised patients constitutes a large future patient pool 45
New market opportunities arise because of increasing resistances against available drugs 46
Acceleration and harmonization of approval procedures 48
Threats 49
Patent expiry and cost containment drive generic incursion 49
Governments impose pricing pressure on drug manufacturers as a consequence of cost containment needs 52
Parallel trade – illegal in the US, encouraged in Europe 53
New vaccination strategies reduce the need for antibacterial treatment 54
Increasing drug resistance promotes new treatment guidelines and restrics antibacterial use 56
US: opportunities and threats 58
Antibacterial market overview 58
Opportunities 62
Direct-to-consumer advertising 62
Branded products achieve high prices as a result of the free pricing system 63
Threats 63
Initiatives by public and private health providers aim to encourage cost containment 63
Further genericization is encouraged by legislation and public programs 64
Although still illegal, parallel trade is likely to be legalized in the medium term 67
Japan: opportunities and threats 67
Antibacterial market overview 67
Opportunities 70
Acceleration of the drug approval process maximizes profit opportunities 70
Separation of manufacturing and marketing entities will benefit both local companies and foreign investors 71
Enhanced R&D activity as a result of new legislation allowing outsourcing 71
Threats 72
Genericization is slowly taking off 72
More restrictive cost containment measurements are under discussion 73
France: opportunities and threats 73
Antibacterial market overview 73
Opportunities 76
Critical attitude towards MRP slows down generic penetration 76
High prescription volume boosts drug revenues 77
The creation of HAS facilitates P&R approval 77
Reimbursement system favors use of innovative drugs 78
Threats 79
Cost containment policies aim at reducing the expenditure for prescription drugs 79
Genericization has increased recently and is further supported 80
Germany: opportunities and threats 82
Antibacterial market overview 82
Opportunities 85
Legalization of mail order provides new distribution channels 85
Free pricing system and culture of innovation encourages novel drug development 85
Fewer cost containment restrictions make the hospital sector a valuable opportunity 86
Threats 86
Jumbo Reference Pricing is threatening drug revenue growth 86
Increasing genericization is strongly supported by the government 87
Italy: opportunities and threats 89
Antibacterial market overview 89
Opportunities 91
The ageing population and the increasing incidence of severe infections fuel a growth in the hospital market 91
Low levels of generic penetration as a result of lack of confidence 92
Reimbursement levels are determined by negotiations rather than regulations 92
Threats 93
Unpredictability of regulations hampers reliable strategic planning 93
Reference pricing might result in downward price spirals and support genericization 94
Spain: opportunities and threats 96
Antibacterial market overview 96
Opportunities 97
Legislation and reimbursement schemes support innovation 97
Decentralization of the healthcare system provides localized opportunities 98
Threats 99
Cost containment measurements restrict manufacturer’s profit margins 99
Government encourages generic use 100
UK: opportunities and threats 100
Antibacterial market overview 100
Opportunities 102
Decreasing incentives for pharmacists to prescribe generics as a result of new DoH initiative 102
Promising niche markets as a result of MRSA and other superbugs 103
OTC is a possible long-term opportunity 104
Threats 105
Price reduction for branded products after PPRS change in 2004 105
Complex structures for P&R negotiations elongate time to market 106
High generic penetration is a large challenge for brand manufacturers 107
Summary of environmental issues affecting the antibacterial country markets 108

CHAPTER 4: FORECAST ANALYSIS 110
Assumptions and events 110
Events excluded from the forecast 110
Product- and class-specific events 110
Patent expiries and genericization 110
Additional indications and major clinical trials 111
Cephalosporins 111
Fluoroquinolones 114
Macrolides 118
Penicillins 120
Carbapenems 121
Aminoglycosides 122
All others 123
New product launches 126
Regional launch date for new products 127
Data definitions, limitations and assumptions 127
Standard units 127
Japanese market data 127
Derivation of sales forecasts and pricing trends 128
Forecasts 128
Forecast methodology 128

CHAPTER 5: COMMERCIAL IMPACT AND LIFECYCLE MANAGEMENT: CASE STUDIES 129
Avoiding the crash – lifecycle management strategies of big pharma facing blockbuster patent expiries 129
Pfizer, Abbott, Roche: Key 2005 lifecycle management strategies in the US antibacterial market 130
Pfizer: bouncing back from Zmax failure with generic azithromycin 131
Abbott: successful switch to Biaxin XL 136
Roche – exiting the antibacterial market after Rocephin’s fall 140
Line extensions – top or flop? 143
Statistical data are overall supportive of line extensions 144
Examples show that careful planning of line extensions is neccessary 144

APPENDIX A – MARKET DATA AND MAJOR BRAND KEY FACTS 146
Summary antibacterials market data 146
CEPHALOSPORINS (J1D1, J1D2) market data 149
FLUOROQUINOLONES (J1G1, J1G2) market data 164
MACROLIDES (J1F0) market data 169
PENICILLINS (J1C1, J1C2, J1H1) market data 173
CARBAPENEMS (J1P2) market data 176
GLYCOPEPTIDES (J1X1) market data 179
AMINOGLYCOSIDES (J1K0) market data 181
TETRACYCLINES (J1A0) market data 182
All others (J1X) market data 184

APPENDIX B - BIBLIOGRAPHY 188
Journal articles 188
Publications by governmental or regulatory authorities 190
Company Press Releases 194
News articles 196
Analyst reports 198
Report methodology 199
About Datamonitor 200
About Datamonitor Healthcare 200
About the Antibacterials analysis team 201
Key therapy team members 201
Holger Rovini, Head of Respiratory and Infectious Diseases 201
Hedwig Kresse, Associate Analyst, Infectious Diseases 202
Disclaimer 203