- Pharmaceutical spending across the globe is expected to grow over the next five years, but at a slower, more even rate than what markets have experienced as of late, according to a new report from QuintilesIMS.
- Released Tuesday from the recently-merged Quintiles and IMS Health, the annual report anticipates worldwide medicine spending to hit $1.5 trillion by 2021 and have a compound annual growth rate (CAGR) of 4% to 7% — down from the 9% seen in 2014 and 2015.
- Contributing to that slowed growth are brands losing their patent exclusivity, increasing rebate use among payers, and the U.K.'s Brexit decision to leave the European Union. Conversely, the last couple of years had fewer patent expirations and the approval of groundbreaking, highly lucrative hepatitis products such as Harvoni and Sovaldi.
While 2014 and 2015 had large spending growth, the average seen across the last five years was 5.9%, indicating much more modest growth in other years. In that way, the QuintilesIMS projections through 2021 reflect "a more sustainable level of spending growth," said Murray Aitken, executive director of the QuintilesIMS Institute, an arm of the company that analyzes healthcare data.
Also notable is the "historically large" number of drugs coming to market in the next five years. The report tallied 2,240 late-stage candidates and about 220 new active substances set to launch during the period. The drugs span a wide range of therapeutic areas – from autoimmune diseases to diabetes – though QuintilesIMS expects the industry will put a large spotlight on cancer research.
"In particular, the sheer number of cancer treatments and their potential combinations and treatment regiments, and the variety of companies involved in their development will bring significant complexity to the patient care landscape over the next five years, even as these drugs also bring dramatic improvements in survival and tolerability," Aitken said.
Specialty medications will also snag greater attention. The drug group was responsible for less than 20% of global pharmaceutical spending a decade ago, but that should rise to 35% by 2021, according to QuintilesIMS.
Since specialty brands are generally 15 to 20 times pricier than new brands, they are expected to drive drug prices – at least in the U.S. Brand prescription prices are also expected to rise, though patients will likely pay less out-of-pocket as more generics debut and copays expand. What's more, the report anticipated "fewer outlier major price increases as these have become unsustainable in light of high-profile media and political attention."
QuintilesIMS found pharmaceutical spending growth in the U.S. dropped by about half, from 12% to 6-7%, in 2016 compared to last year. U.S. markets were expected to have the same 4-7% growth rate as the worldwide average through 2021. European expectations also matched the global average, though Brexit could cut that rate by 1.5%. China's CAGR was 4%.