Global spending on prescription medicines is forecast to increase between 2% and 5% annually over the next five year and exceed $1.1 trillion overall by 2024, up from $955 billion last year, thanks to increased overall use of treatments and costlier specialty therapies, according to a new report.
Despite the big numbers, the growth in spending is actually expected to be slower than during the previous five-year period, when the compounded growth rate was 4.2%. The slower rate at which spending is forecast to grow reflects pricing pressures and the loss of patent or marketing exclusivity for brand-name drugs, according to projections by the IQVIA Institute for Human Data Science.
“Globally, we’re seeing that cost reductions from generic and biosimilar competition, and brand price negotiations, are offsetting most overall spending increases,” said Murray Aitken, an IQVIA senior vice president. He explained that forecasts were calculated using net sales — which refers to prices after estimates rebates and discounts are paid by drug makers to win insurance coverage.
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