Global Medicine Spending to Top $1.5 Trillion by 2023

January 29, 2019

The US and pharmerging markets will drive growth in drug spending; number of approvals to increase.

Global drug spending will reach $1.2 trillion in 2018 and is expected to top $1.5 trillion by 2023, according to a study from the IQVIA Institute for Human Data Science Study, released on Jan. 29, 2019. The projected 2023 spending level, up 50% from 2016, will be reached despite lower growth of 3–6% on an annual compound basis compared to 6.3% over the past five years.

United States and pharmerging markets will drive growth over the next five years with 4–7% and 5–8% compound annual growth respectively, the study reports.

The report, The Global Use of Medicine in 2019 and Outlook to 2023: Forecasts and Areas to Watch, also identified key factors that will influence healthcare costs including the following:

A seven-year decline in prescription opioid use in the US is expected to continue, resulting in prescription declines of one-half to one- third the current level measured in 2018.

More new products are expected to be launched from an annual average of 46 in the past five years to an average of 54 through 2023. The annual average spending in developed markets on new brands is expected to rise slightly to $45.8 billion in the next five years.

Net drug prices in the US increased at an estimated 1.5% in 2018 and are expected to rise at 0–3% over the next five years. Some products may have net price declines in competitive markets.

Prescription digital therapeutics are a new emerging treatment modality and could be applied in areas where drug therapy alone has left unmet needs, such as behavioral health and cognition.

Pharma companies will hire more specialists in patient affairs and patient advocacy to build the strength of the patient voice both within and outside the company, and develop repositories of real-world evidence, and encourage the growth of patient registries that can be used for partnerships.

Source: IQVIA