Prescription drug spending worldwide to hit US$1.5 tn in 2021, report says
The annual growth rate of global spending on prescription medicines is expected to decrease and become more balanced in the next five years, although it is estimated to reach nearly US$1.5 trillion by the year 2021, according to a forecast recently released by Quintiles IMS Holding.
QuintilesIMS, an information and technology-led healthcare service provider, regularly tracks prescription drug data for the industry. The company is a merger between healthcare data and consultancy firm IMS Health and clinical research organization Quintiles.
The figure, based on wholesale pricing, is up nearly US$370 billion from estimated 2016 spending. The US will account for up to US$675 billion of the US$1.5 trillion.
When accounting for anticipated discounts and rebates to health insurers and other payers, 2021 net spending will be closer to US$1 trillion, the QuintilesIMS Outlook for Global Medicines through 2021 report found.
Annual spending growth over the next five years is forecast at 4-7%, primarily driven by newer medicines for cancer, diabetes and autoimmune diseases in developed markets. That compares with spending growth of nearly 9% in 2014 and 2015 fueled in part by surging demand for new hepatitis C cures that has since leveled off.
Murray Aitken, executive director of the QuintilesIMS Institute which compiled the data, said in an interview that the market is returning to a more balanced and sustainable level of expansion after two years of unexpectedly high levels of growth which, they think, health systems and payers will be able to manage better.
Spending in the US, the largest market with by far the highest drug prices, is expected to account for more than half of global growth over the period, at a compound annual rate of 6-9%, or 4-7% including discounts and rebates. That is down from 12% spending growth in 2015.
The report projects a slowdown in US branded drug price increases, possibly a result of rising political pressure. It sees annual wholesale price increases of 8-11% and net prices rising 2-5%.
The report predicts an average of 45 new drug launches each year, a historically high rate. While many will be very expensive treatments, the report sees rising costs partially offset by a higher level of drugs going off patent than in the previous five years. That includes the anticipated effect of more biosimilars – cheaper versions of high-priced biotech medicines – entering the market.
“We are projecting they will have a total impact over the next five years in the range of US$27 billion to US$58 billion in savings in the US market,” Aitken said.
Economic slowdowns in Europe and emerging markets, such as China, Brazil and Russia, will contribute to an overall drag on spending growth and slow plans to expand access to more medicines, the report said.
For example, China is expected to spend between US$150 billion and US$180 billion in 2021, but annual spending growth for medicines will fall to less than 7% over the next five years from about 14% over the prior five.
The compound annual growth rate of drug spending in Europe is estimated at just 1 to 4 percent through 2021. The relatively weak economic growth across the region constrains expansion in healthcare and drug budgets, Aitken said.
Category: Features, Pharmaceuticals
