Global spending on medicines is predicted to grow slowly in the next five years, with growth in developed countries much slower than in emerging markets.
In a recent study, the IMS Institute for Healthcare Informatics estimated that by 2017, global spending on medicines will rise from 3 percent to 6 percent to a total $1.2 trillion by 2017.
“We’re expecting the lowest growth rate ever in total spending on pharmaceuticals over the next five years, a compound growth rate of between 3 and 6 percent or about $220 billion in total,” said Murray Aitken, executive director of IMS Institute for Healthcare Informatics, in an online presentation on IMS’ website.
The slower growth forecast reflects an ongoing shift to generics with the expiration of patents; continued tight budgets in the wake of slow economic recovery, especially in Western Europe; and measures in China to constrain pharmaceutical spending along with softening economic indicators, he said.
On the plus side, there is greater access to medicines by the world’s rapidly expanding middle class and more countries expanding health coverage, the institute said in a news release about the study.
The U.S. will accelerate spending in 2014 after two years of lower spending with the expansion of healthcare access and fewer expiring patents. Still, “U.S. growth will remain at historically low levels and the country will have a smaller share of the global market through 2017, but a constant share of developed markets,” the report said.
Global spending will increase by $205 billion to $235 billion during the period of 2013 to 2017. During 2008 to 2012, the level of global spending was $234 billion.
Growth in developed markets will rebound from around negative $3 billion in 2012 to $20 billion to $25 billion by 2017. But annual spending growth will be just 1 percent to 4 percent among the markets of North America, Europe and Japan, according to Aitken. "In contrast, pharmerging nations will experience 10-13 percent spending growth overall—the result of economic expansion, changes in epidemiology and demographics, and greater government and private insurance funding for healthcare,” he said in the release.
Spending for specialty medicines, especially for cancer treatment, is forecast to reach from $230 billion to $240 billion in 2017, which is 38 percent higher than the $171 billion spent in 2012, the release said, something payers are concerned about.