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Infrastructure and payer decisions will determine drug choices in emerging and developed regions.
Biopharma industry headlines in 2015 reflected the positive (more drug approvals and the first US-approved biosimilar); the negative (inflated drug prices, Martin Shkreli, and tax inversion-driven mergers); and the uncertain (multiple mega mergers and FDA initiatives).
In this issue, the editors look at key industry trends and expectations for the year ahead, including these predictions for future global drug demand.
Improved patient access to chronic disease treatment and breakthrough drug therapies will help reduce the “medicine use gap” between emerging and developed markets, driving global spending on drugs to grow at a 4-7% compound annual rate over the next five years. Regional economic conditions and healthcare infrastructure, however, will dictate the types of drugs prescribed, number of medicine doses, and ultimately, the volume of pharmaceutical sales.
By 2020, total patient spending on medicines will be $1.4 trillion, reports the IMS Institute for Healthcare Informatics (1); however, the global spending increase from 2015 to 2020, estimated to be 29-32%, is below the 35% increase of the prior five years.
Global medicine use will reach 4.5 trillion doses in 2020, the study predicts, up 24% from 2015. Emerging markets will account for most of the increase, led by India, China, Brazil, Indonesia, and Africa. Generic drugs, non-original branded drugs, and over-the-counter products will account for 88% of total medicine used in emerging markets, the report says. More than 90% of the prescription drugs filled in the United States in 2020 will be generic drugs, up from the present level of 88%.
Brand spending in developed markets is expected to reach up to $590 billion, a 34% increase in spending over 2015 on an invoice price basis, thanks to new product launches, and price increases in the US--which may be offset by discounts and rebates. Invoice price growth, which does not reflect discounts and rebates received by payers, is expected to continue at historic levels during the next five years; however, competition and payer resistance will keep net price increases to 5-7% annually.
Spending growth will be curbed by patent expiries, which will result in $178 billion in reduced spending on branded products, including $41 billion on biologics, as biosimilars become more widely adopted.
The rise of specialty medicines
Global spending on specialty medicines used to treat chronic, rare, or genetic diseases is expected to reach 28% of the total spending by 2020. The report estimates that more than 225 medicines will be introduced by 2020, with one-third focused on treating cancer; other development areas are hepatitis C, autoimmune disorders, heart disease, and rare diseases. Adoption of specialty medicines will be most prevalent in established markets.
“During the next five years, we expect to see a surge of innovative medicines emerging from R&D pipelines, as well as technology-enabled advances that will deliver measurable improvements to health outcomes,” said Murray Aitken, IMS Health senior vice-president and executive director of the IMS Institute for Healthcare Informatics, in a press statement. “With unprecedented treatment options, greater availability of low-cost drugs and better use of evidence to inform decision making, stakeholders around the world can expect to get more ‘bang for their medicine buck’ in 2020 than ever before.”
1. IMS Health, Global Medicines in Use in 2020 (Parsippany, NJ, November 2015).
Article DetailsBioPharm Int
Vol. 29, No. 1
When referring to this article, please cite it as R. Peters, " Emerging Nations Close the Medicine Use Gap," BioPharm International 29 (1) 2016.