Global pharma spending ‘to soar 30% by 2018’
Medicines have seen spending on them significantly rise on a global scale and they are set to soar by as much as 30% over the next four years. With expenditure of nearly $1.3 trillion at the end of the four years, according to new forecasts.
The world pharma market will increase at a compound average growth rate (CAGR) of 4%-7% during 2013-18, rising $305-$335 billion over the period (based on constant exchange rates) compared with $194 billion growth seen in the previous five-year period, 2009-13, when the CAGR was 5.2%, says the research, from the IMS Institute for Healthcare Informatics.
This huge boost in growth will be driven primarily from increased specialty drug innovation, greater access to medicines and reduced impact of expired patents . There are also forecasts for annual spending growth to spike in 2014 at $70 billion, which is up from $44 billion in 2013 and $26 billion in 2012.
“The higher level of spending growth we’re projecting over the next five years reflects an unusual combination of higher spending on the surge of innovative medicines for patients and lower savings from patent expiries,” says Murray Aitken, IMH Health senior vice president and executive director of the IMS Institute.
“This is particularly evident this year and next in developing countries, and especially in the US, which accounts for more than a third of the global market,” he adds.
With the developed markets, who are led by; the US, the five major European markets (UK, France, Italy Spain, and Germany) as well as Japan, will be the primary driving forces behind this increased growth, while they will continue to moderate as cost containment measures further limit price levels. Only France and Spain will see a contraction in pharmaceutical spend per capita in 2018, as a result of policies aimed at curbing spending growth.
Currently accounting for 25 of global medicines expenditure, the 21 pharmamerging markets will look to increase their spending by more than 50% by 2018, with a CAGR of 8%-11% being forecast over this period as well. This will only happen though if they continue to broaden access to treatments due to their expanding economies and ongoing government efforts to provide universal health coverage. By 2018, over 80% of growth in the pharmerging markets will be attributed to non-branded medicines, including greater use of biologic drugs.
China, which is already the world’s second-largest pharmaceutical market, will reach spending levels of $155-$185 billion in 2018, the report adds.
Specialty medicines are expected to contribute 40% of total global spending growth to 2018, with higher expenditures particularly in the developed markets. Most of this growth will be through products which bring patients new treatment options, with particularly notable advances expected in the areas of oncology, autoimmune, respiratory, antiviral and immunosuppressant therapies.
The recent surge in cancer drug innovation will continue and contribute to global spending on all oncology drugs, with this set to rise from $65 billion in 2013 to around $100 billion in 2018, while the introduction and uptake of potent new hepatitis C therapies are forecast to producing spending totalling about $100 billion in the five years to 2018, the report forecasts.
Further to all of this almost 200 new drugs are expected to be launched in the next five year. With over 2,000 products currently in late stage development with a quarter of them being oncology drugs. Although with all these drugs on the horizon, its best to consider that the availability to new medicines for patients worldwide varies significantly depending on the country and the disease area. On average less than half of medicines that are launched during the past five years are now available across the major developed markets.
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