Global spending on medicines will total almost $1.1 trillion by 2015, according to a study that the IMS Institute for Healthcare Informatics published last week. The study, titled “The Global Use of Medicines: Outlook Through 2015”, predicts that spending will grow at a compound annual rate of 3–6% during the next five years, which is slower than the 6.2% annual growth rate of the past five years. Major factors that will influence future sales growth, according to the study, include lower levels of spending growth for medicines in the United States, patent expirations in developed markets, strong demand in developing markets, and policy-driven changes in various countries.
“Past patterns of spending offer few clues about the level of expected growth through 2015,” said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics, in a press release. “There are unprecedented dynamics at play, which are driving rapid shifts in the mix of spending by patients and payers between branded products and generics, and across both developed and emerging markets.”
Spending on branded drugs will decline more rapidly in the next five years, according to the study. Although aging populations in developed markets will cause incremental spending increases on brands, the increases will be negated by the effect of patent expirations. The study predicts that spending for branded products in developed markets will remain at the same level in 2015 as in 2010. The global market share for branded medicines, which fell from 70% in 2005 to 64% in 2010, likely will decline to 53% in 2015. Though growth for branded products in emerging markets will be strong, 80 cents of every dollar spent on medicines in these markets will be for generics by 2015.
Patent expirations will save payers in developed countries roughly $98 billion through 2015, compared with $54 billion in savings realized in the previous five-year period. Worldwide, patent expirations will save payers $120 billion by 2015, but payers will spend approximately $22 billion on generic medicines. The US will experience the largest expansion of generic spending among developed markets. Japan is predicted to have the lowest share of spending on generics, despite policy incentives to increase generic prescribing and dispensing.
The next five years will witness the introduction of several novel therapies that expand patients’ treatment options, according to the study. These products will include oral medications for multiple sclerosis, two recently launched treatments for arrhythmia, medicines for metastatic melanoma that improve survival rates, and the first therapeutic prostate-cancer vaccine.
Economic growth and government efforts to expand healthcare access will lead emerging markets to nearly double their spending on medicines during the next five years, according to the study. Spending could reach $285–315 billion, compared with $151 billion in 2010. By 2015, the emerging markets will become the second-largest geographic segment globally in spending on medicines, thus surpassing Germany, France, Italy, Spain, and the United Kingdom combined, and approaching US spending levels.
Health-policy changes, including the Affordable Care Act, price controls in China, and Japan’s new protected innovative products policy, also will affect spending during the next five years. Public and private payers, especially in the US, France, and Germany are applying rebates and discounts more extensively. IMS estimates that the amount of these off-invoice discounts will rise from $60–65 billion in 2010 to $65–75 billion by 2015.
In addition, the study predicts that spending on biosimilars will exceed $2 billion annually, or about 1% of total global spending on biologics, by 2015. New biosimilars entering the US and European markets will help increase spending for biosimilars over the 2010 level of $311 million.
Oncology will remain the leading therapy class in 2015, but spending growth will slow to a rate of 5–8%, according to the IMS Institute. New oral antidiabetic agents will contribute to 4–7% spending growth for diabetes treatments. Spending growth for asthma and chronic obstructive pulmonary disease treatments will slow to 2–5%, and spending on lipid regulators will fall to $31 billion in 2015, according to the study.
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