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A new IMS Health report forecasts the growth of global spending by a 4% to 7% compound annual rate over the next five years.
Total global spending on pharmaceuticals will increase by $305 billion to $335 billion through 2018, compared to $219 billion during the past five years, announced a new study from IMS Institute for Healthcare Informatics.
Global spending for medications will grow up to 30% by 2018, thanks to more specialty drug innovation, greater patient access to medications, and reduced impact from patent expiries, the study found. IMS expects global spending to grow at a 4% to 7% compound annual rate over the next five years. Annual spending will spike this year when absolute growth will be around $70 billion, up from $40 billion in 2013.
“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 medications for patients and lower savings from patent expiries,” said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics. “This is particularly evident this year and next in developed countries – and especially in the U.S., which accounts for more than a third of the global market.”
Experts forecast the launch of more than 150 new drugs over the next five years, continuing a wave of innovation similar to levels seen in the mid-2000s, the Institute reported. “More than 2,000 products are currently in late-stage clinical development, of which oncology therapies make up fully one-fourth of the pipeline,” said a statement from IMS Institute for Healthcare Informatics.
In fact, global spending on oncology drugs will reach around $100 billion in 2018, compared to $65 billion in 2013.
Contributing to the acceleration in new drug development is the growing number of medications receiving the FDA’s Breakthrough Therapy designation. In addition, breakthrough specialty medications will contribute a projected 40% of total global spending growth through 2018. Advances will be particularly notable in the oncology, autoimmune, respiratory, antiviral, and immunosuppressant therapy areas. For example, new treatments for hepatitis C will result in a total of approximately $100 billion spent from 2013 through 2018.
Meanwhile, implementation of health reforms in 21 “pharmerging” countries is increasing demand for medications. Trend-watchers expect China, already the world’s second largest pharmaceutical market, to spend $155 billion to $158 billion on medations in 2018.
To download the report, visit www.theimsinstitute.org.