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Global drug spending will rise 30% by 2020, to $1.4 trillion

Published on 18/11/15 at 10:04am
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Global spending on drugs will increase 30% to $1.4 trillion by 2020, as more patients get access to treatments and technology drives patient adherence.

According to research by the IMS Institute for Healthcare Informatics, more than half of the world’s population will live in countries where medicine use will exceed one dose per person per day by 2020. This is up 31% from 2005 and 24% from 2015, as the medicine use gap between developed and ‘pharmerging’ markets narrows. 

Patients in these markets are set to have greater access to chronic disease treatments and breakthrough drug therapies, with global spending forecast to grow at a 4-7% compound annual rate over the next five years. 

The report, Global Medicines Use in 2020: Outlook and Implications, found that the total global spend for pharmaceuticals will increase by $349 billion on a constant-dollar basis, compared with $182 billion during the past five years. 

Most of the global increase in medicine use over the next five years to come from the leading pharmerging markets: India, China, Brazil and Indonesia, which will account for nearly half of the growth from such emerging markets. The report also predicts:

Developed markets

Developed markets will remain relatively stable, with a trend towards original branded products, as the use of specialty medicines becomes more widespread.

  • Generics, non-original branded  and over the counter (OTC) products will account for 88% of total medicine use in pharmerging markets by 2020, and provide the greatest contribution to increased access to medicines in those countries
  • Spending on branded drugs in developed markets is set to rise by $298 billion
  • Patent expiries are expected to result in $178 billion in reduced spending on branded products, including $41 billion in savings on biologics as biosimilars become more widely adopted. 

Innovation and technology

Disease treatment entering the next decade 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.

  • More than 225 medicines will be introduced by 2020 – a third of which will be cancer treatments,
  • 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.

Murray Aitken, executive director of the IMS Institute, concludes: “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.

"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.” 

Joel Levy


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