IMS 2020 forecast: Drug spending will hit a whopping $1.4 trillion
- According to a recent IMS report, total global drug spending will hit $1.4 trillion in 2020. The roughly 30% increase in spending will be sparked by increased demand in emerging markets as well as by higher priced specialty drugs in developed economies.
- The report, titled "Global Medicine Uses in 2020," envisions a compounded annual growth rate (CAGR) of 4% to 7% over the next five years. Current spending on drugs for 2015 is expected to be roughly $1.07 trillion.
- IMS estimates that 225 new drugs will be approved within the next five years, many of them related to cancer treatment.
While part of the increased drug spending forecast is a function of higher-priced specialty and rare disease drugs, a large part of it is increased uptake of drugs, particularly generics, in developing markets. This is a positive development for patients in countries expected to see wider medication use, notably Indonesia, Brazil, Saudi Arabia, and Egypt.
According to the IMS report, 4.5 trillion doses of medicines will be dispensed in 2020—a 24% increase. Average cost per dose will be just 30 cents. By their estimates, more than half of the people in the world will consume at least one medicine per day.
Immuno-oncologic and other specialty drugs, such as new hepatitis C drugs, have a large role in this growth. By 2020, 36 million people with hepatitis C will have received treatment with one of the new oral regimens, representing almost 25% of all HCV-infected individuals.
The report also foresees some price relief due to patent expiry of branded drugs. Spending on brand drugs will increase by $298 billion but that will partially be offset by $90 billion in net price reductions stemming from lapsed patents. IMS forecasts biosimilars will make up a large part of that $90 billion offset.