Despite a recent tapering of year-on-year growth, the global market for prescription drugs is forecast to reach $1.5 trillion per year by 2021, a 33 percent increase from 2016.
That’s according to a new report by the QuintilesIMS Institute, the research arm of the healthcare informatics company QuintilesIMS.
The report, “Outlook for Global Medicines Through 2021: Balancing Cost and Value,” lands at an interesting time, with everyone from politicians to payers to patients debating the cost of drugs and the burden they place on healthcare systems.
In a phone interview, executive director of the QuintilesIMS Institute, Murray Aitken, said the industry’s controversially high year-on-year price increases are predicted to slow down.
“Spending on drugs has been growing at unusually high levels in the last two years; globally around 9 percent in 2014 and 2015,” Aitken explained. “Looking forward to the next five years, we see that growth moderating to a more sustainable level than we’ve seen. Still higher than inflation, but at a level that’s more manageable for payers and health systems.”
Global spending on medicines is still expected to grow at a 4-7 percent compound annual rate during the next five years. According to the report, those numbers reflect a strong drug discovery pipeline, which should generate a wealth of new drugs in the near-future.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“We’re seeing over 2,200 molecules in late-stage clinical development,” Aitken said, referring to drugs in Phase 2 and 3 trials or pre-registration. “We think that will yield about 45 new drugs per year, on average for the next five years, which would be a historically high level of new drugs emerging from the R&D pipeline.”
By tracking global healthcare markets over multiple years, the analysts hope to minimize statistical disruption from any one policy or trend.
On Monday, for example, Novo Nordisk became the second major drug company to commit to limiting its annual drug price increases to single-digits.
Many more unknowns reside within the White House.
“I think every year there is uncertainty, to be sure, but over a five-year period, things tend to move a little bit in predictable ways,” Aitken said. “It’s only on rare occasions that we would see a significant shift from what we expected.”
Outside the U.S., QuintilesIMS observed a slowdown in growth and consumption in what its calls ‘pharmerging markets’ in developing nations such as China, Russia, and Brazil.
Combined, these markets grew about 7 percent per year from 2011-2016. During the next five years, growth is expected to slow to around 4 percent.
According to Aitken, “that slowdown is driven primarily by the macroeconomic slowdown that many of these emerging markets are facing. While these markets are still growing, they’re not growing as fast as they were five years or ten years ago.”
Savings are also expected as more drug patents expire.
Photo: D3Damon, Getty Images
