Global spending on medicines is expected to meet the $1 trillion threshold in 2014 and reach $1.2 trillion by 2017, according to a recent report by the IMS Institute for Healthcare Informatics. The report, The Global Use of Medicines: Outlook through 2017, found that growth in global spending on medicines increased 2.6% to $965 billion in 2012, and is forecast to grow at a 3–6% compound annual rate over the next five years.
IMS projects a gradual increase in global medicine spending growth during the next five years. Annual growth in spending is expected to rise from 2–3% in 2013 to 5–7% in 2017, the highest pace of growth since 2009. The single largest impact on growth levels is the continuing effect of many blockbuster drugs coming off patent and an increase in lower-cost generic alternatives. In addition, the gradual return of global growth in gross domestic product to more than 4% by 2017 will contribute to an upward trend in medicine spending levels.
Specialty medicines will be the single largest contributor to branded drug spending growth through 2017, according to IMS. Spending on specialty medicines is expected to reach $230–240 billion in 2017, up 38% from the $171 billion spent in 2012. In developed markets, growth in spending for specialty drugs is expected to increase 30% during the next five years to reach $190–200 billion. In pharmerging markets, the use of specialty medicines is limited, but spending is expected to rise by nearly 90% through 2017, to $40–50 billion annually.
“As we pass the fifth anniversary of the global economic slowdown, and with many countries moving toward universal health coverage, we expect to see continued divergence in growth rates between the pharmerging and developed markets,” said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics, in IMS press release. “Austerity measures aimed at medicine budgets along with the growing availability of lower-cost generics will lead to annual spending growth of 1–4% among the markets of North America, Europe, and Japan. In contrast, pharmerging nations will experience 10–13% spending growth.