Gaze into the pharmaceutical crystal ball and you will see a hefty increase in the worldwide use of medicines over the next five years.
By 2020, an estimated 4.5 trillion doses of prescription drugs will be used by patients, up 24 percent from this year. In particular, increased usage is expected to jump in China, Brazil, India, and Indonesia, where the middle class is expected to swell and have greater access to health care, according to the IMS Institute for Healthcare Informatics, a unit of IMS Health, the market research firm.
Meanwhile, global spending on medicines is forecast to reach $1.4 trillion, an increase of between 29 percent and 32 percent from 2015, according to the IMS report. This amounts to a compounded annual growth rate of 4 percent to 7 percent over the next five years. However, this trails the 35 percent increase in spending that was seen between 2010 and 2015.
Why? Spending will be fueled by patients who, in many countries, are expected to have greater access to medications for chronic diseases and breakthrough innovations. But IMS forecasts a drop of $178 billion in spending on more expensive brand-name medicines, which will face competition from lower-cost generics and biosimilars.
“By 2020, medicines will be playing a much more significant role across the world in terms of patient care,” said Murray Aitken, executive director of IMS Institute. “By then, we’ll have 225 new medicines on the market that will be making a difference in people’s lives. It comes with a $1.4 trillion price tag, but we would argue, in terms of value, things have never been better.”
Here are some other nuggets from the report:
- Not surprisingly, generics will continue to be widely prescribed. In five years, generics will constitute nearly 92 percent of all prescriptions in the United States, up from 88 percent currently. Spending on medicines in the US is forecast to hit anywhere from $560 billion to $590 billion, a 34 percent increase in spending over 2015 on an invoice price basis, which means after subtracting discounts and rebates.
- Spending on brand-name drugs in developed markets, including the US and Western Europe, will increase by $298 billion by 2020, thanks to new products and price increases primarily in the US.
- In 2020, 28 percent of global spending will be for specialty medicines, up 26 percent from this year. In developed markets, these drugs will account for 36 percent of spending in 2020.
- Of the specialty drugs, cancer meds will generate between $100 billion and $120 billion in sales, while hepatitis C treatments will notch between $45 billion and $55 billion.
- One-third of the more than 225 medicines that IMS expects will be introduced by 2020 will be used for combating cancer.
- Developed markets will contribute 63 percent of the spending on medicines.
- By 2020, the number of medicines for orphan diseases, which affect fewer than 200,000 patients in the US and Europe, will reach an all-time high of 470 drugs.
- Over 50 percent of the world’s population will consume more than one dose per person per day of medicines, up from one third of the world in 2005.