Global drug spending to reach $1.4 trillion

Global spending on medications will reach $1.4 trillion by 2020 due to greater patient access to chronic disease treatments and breakthrough innovations in drug therapies, according to a new report.

The report Global Medicines Use in 2020: Outlook and Implications, published by IMS Institute for Healthcare Informatics, predicts global drug spending will grow 4–7% during the next five years.

In the United States, spending on medicines will reach between $560 billion and $590 billion in 2020, a 34% increase in spending over 2015. In addition, more than 90% of U.S. medicines will be dispensed as generics by 2020.

Total global spend for pharmaceuticals during the next five years will increase by $349 billion, compared to the $182 billion increase during the past five years.

More bang for the buck

“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’s senior vice president and executive director of the IMS Institute for Healthcare Informatics.

“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,” Aitken said.

Other findings

Other report findings include:

• More than 225 new medicines will be introduced by 2020, with one-third focused on treating cancer. “Disease treatments in 2020 will be transformed by the increased number and quality of new drugs in clusters of innovation around cancer, hepatitis C, autoimmune disorders, heart disease, and an array of rare diseases,” according to the report.
• During the next five years, an additional 75 new orphan drugs are expected to be available for dozens of therapeutic areas that currently have limited or no treatment options.
• The impact of the Affordable Care Act (ACA) will continue to have an affect on medicine spending during the next five years, primarily because of expanded insurance coverage. By 2020, there will be broad adoption of ACA provisions that encourage greater care coordination.
• Global medicine use in 2020 will reach 4.5 trillion doses, up 24% from 2015. Most of the global increase in use of medicines will take place in India, China, Brazil, and Indonesia.