Global Drug Spending Expected to Reach $1.5 Trillion by 2021

Global spending on medicines is expected to reach $1.5 trillion by the year 2021; however, spending is also expected to slow from a record pace of nearly 9% in 2014 and 2015 to a 4% to 7% compound annual rate during the next 5 years, according to a new report from QuintilesIMS Institute. 

The Outlook for Global Medicines Through 2021: Balancing Cost and Value report attributes the predicted slowdown to pricing and market access pressures, lower volume growth in “pharmerging” markets, and increased savings from patent expirations.

“The outlook for medicine spending growth reflects a more sustainable level for health systems, following the unexpectedly high growth seen in recent years,” said Murray Aitken, senior vice president and executive director of the QuintilesIMS Institute. “At the same time, the astonishing level of scientific advances for disease treatments inevitably will place ongoing pressure on funding for medicines—requiring value-based assessments that balance patient needs and pricing levels with competing health care priorities.”

Overall, global medicine spending is forecast to reach nearly $1.5 trillion by 2021—33% higher than 2016 levels. Much of the growth will be fueled by innovations in oncology, autoimmune, and diabetes treatments, QuintilesIMS reported. The world’s largest pharmaceutical market, the United States is slated to contribute to 53% of the forecasted growth; China, the second largest market, is expected to contribute 12%.  

Meanwhile, new drug launches over the next half-decade will likely reach historically high levels, according to the report. More than 2000 medicines in the late-stage pipeline are expected to generate an average 45 new actives substances each year. The medicines will address unmet needs across a span of diseases, including cancer, autoimmune, metabolic, and nervous system disorders.

“The sheer number of cancer treatments, their potential combinations in treatment regimens, and the variety of companies involved in development will bring significant complexity to the patient care landscape during the next 5 years,” explained a QuintilesIMS press release. “Dramatic improvements in survival and tolerability are expected and will be accompanied by substantially greater levels of clinical trial and real-world information in support of treatment decisions.”

For the US market specifically, the company predicts the growth rate to decline from 12% in 2015 to between 6% and 7% in 2016. Through 2021, growth is predicted to hover between 6% and 9% on an invoice price basis. QuintilesIMS attributed the slowdown to the end of hepatitis C treatment-driven growth and to patent expirations. —Jolynn Tumolo