Skip to NavigationSkip to content

Global drug spending projected to reach $1.1 trillion by 2024, report argues

Published on 18/03/20 at 02:16pm

Total global spending on medicines is set to break $1.1 trillion by 2024, a new report released by IQVIA has asserted, rising from $935 billion in 2019.

The report, titled ‘Global Medicine Spending and Usage Trends: Outlook to 2024’ , says that this represents a projected to increase by increments of between 2% and 5% until 2024, compared to the growth of 4.2% experienced over the past five years.

“The report draws upon IQVIA proprietary data sets. Those data sets are based on a number of different sources of information, including pharmaceutical wholesalers who handle the physical distribution of medicines," Murray Aitken, IQVIA Senior Vice President and Executive Director of the IQVIA Institute for Human Data Science, told Biospace prior to the report’s publication. "We work with those wholesalers around the world in over 100 countries to gather information about their shipments of pharmaceuticals to retail pharmacies and hospitals, for example. That’s the foundation for the data we use.”

Aitken was keen to point out that this growth projected by the report is actually slower than in previous years. He argues that, on one hand, payers are moving to constrain growth within their budgets, and this manifests in these parties shrinking their budgets in line with negotiations with drug manufacturers.

While this is not a new phenomenon, it has become observably more intense year on year, and this could result in prices on branded drugs fall by a percent or two, but this could be as much as 5% in some developed countries, the report notes.

The slowed growth could also be a product of patent protection losses in the projected period. “The impact there will be to reduce the market for those branded drugs by about $139 billion over the next five years, compared to $107 billion reduction that we saw in the past five years,” Aitken explained. “We’ve got more impact bringing down growth from the effects of drugs losing exclusivity and having generics or biosimilars entering the market.”

This is not quite offset by the industry’s healthy R&D pipeline as noted by the report, but it also points out that the adoption of speciality medicine is also a key driver of increased medicine spending, and is expected to make up 40% of global spending by 2024, up from around 36% today.

Matt Fellows

Mission Statement is a leading portal for the pharmaceutical industry, providing industry professionals with pharma news, pharma events, pharma service company listings and pharma jobs,
Site content is produced by our editorial team exclusively for and our industry newspaper Pharmafocus. Service company profiles and listings are taken from our pharmaceutical industry directory, Pharmafile, and presented in a unique Find and Compare format to ensure the most relevant matches