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Report: Global spending on medicine to surpass $1 trillion in 2014

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    A Parsippany-based health care research company is projecting global spending on medicines will surpass $1 trillion in 2014, a trend driven by a growing middle class worldwide and a rising number of specialty drugs.

    IMS Institute for Healthcare Informatics says drug spending, estimated at $965 billion in 2012, is forecast to grow 3 to 6 percent annually over the next five years. IMS projects that total will surpass $1.2 trillion by 2017.

    The report also shows a divergence between developed nations and the so-called "pharmegring markets," or emerging markets targeted by pharmaceutical companies, typically led by countries such as China and India with rising population and incomes.

    Spending is projected to grow 10 to 13 percent in emerging countries, IMS said, a trend reflecting economic expansion, demographic growth, and increases in government and privately funded insurance.

    But spending in North America, Europe and Japan are projected to grow 1 to 4 percent. IMS says the modest growth reflects government austerity programs and increased availability of generics. Each of these regions faces distinct challenges as well, said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics.

    Japan is mandating more off-patent drugs be dispensed as generics to ease burdens on its aging population; Europe continues to experience economic stagnation and the United States faces uncertainty with implementation of the Affordable Care Act, Aitken said.

    "In the United States, no one really knows how things are going to unfold in the next 24 to 36 months and what impact that will have on the health system," Aitken said.

    The report said specialty medicines, particularly those focusing on cancer treatment, will drive increases to brand drug spending in the coming years. The rise in specialty drugs coincides with the decline in blockbuster sales as more big-selling drugs come off patent.

    "The overall portfolio is becoming more skewed toward specialty medicines," Aitken said. "That's definitely where the growth is coming from."

    IMS projects spending on specialty medicines will reach $230 billion to $240 billion in 2017, up 38 percent from the $171 billion in 2012. About 35 new medicines are forecast to be launched annually in the next five years.

    IMS says most launches will address unmet needs, including orphan diseases that focus on small patient populations, and medicines that could transform treatments in rheumatoid arthritis, cystic fibrosis and several tumor types. Most specialty drugs are expected to be consumed in high-income countries.

    The full report, titled "The Global Use of Medicines: Outlook through 2017," is available at theimsinstitute.org.


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