IQVIA report: Global medicine spending to top $1.1T by 2024

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IQVIA report: Global medicine spending to top $1.1T by 2024

By Sandra Levy - 03/17/2020

The global pharmaceutical market has increased at a 3% compound annual growth rate since 2014, according to IQVIA Institute’s “Global Medicine Spending and Usage Trends Outlook to 2024" report.

The report revealed that global medicine spending will increase at 2%-5% annually and exceed $1.1 trillion in 2024.

The report also noted that in 2019, patients globally received an estimated 1.8 trillion days of therapy; an average of 234 per person.

Overall, global use of medicine has increased at a 3% compound annual growth rate since 2014, slowing from a 4% rate seen 2009–2014.

The majority of medicine use is in pharmerging markets, which have large populations, but have per capita rates of use still markedly lower than in higher income countries.

Diabetes, respiratory, cardiovascular and cancer treatments, which account for 71% of deaths worldwide, comprise most of the use, the report said.

Most developed and pharmerging markets will see slowing rates of growth in the next five years compared to the last five, with rates between 1–4% and 5–8%, respectively.

The report projects that developed markets are expected to see slowing brand growth despite increases in specialty medicine spending, as greater brand losses of exclusivity offset higher new brand product spending, and price and volume growth both slow.

New brands will contribute $165 billion in spending growth through 2024, up from $126 billion in the past five years, according to the report.

Brand losses of exclusivity are projected to have a $139 billion negative impact on brand sales from 2020–2024, compared to the $107 billion impact seen from 2014–2019.

The report stated that notable loss of exclusivities in the next five years will bring additional medicines to improve health outcomes as generics bring greater availability of medicines at lower cost and will expand access in these markets.  

Additionally, the report noted that significant products contributing to brand loss of exclusivity in 2023 include Januvia, Humira, Victoza, and Vyvanse, with combined projected losses of nearly $15 billion. From 2020–2024, these products are predicted to generate losses of or greater than $2.7 billion each. Importantly, the losses are not calculated at net prices, meaning losses could be slightly less when accounting for rebates, which are typically discontinued post-expiry. Additionally, some losses are offset by generic uptake and increased uptake overall, meaning payer savings could be less than the stated amounts. The timing of expiries and generic entry are particularly volatile and based on litigation and other factors, said IQVIA.  

Manufacturer net prices are expected to grow between 1% and -2% in the United States over the next five years, significantly below historic levels, while in other developed markets, net price declines of -2 to -5% are expected as a result of continued payer and government actions, according to the report.

The report also revealed that specialty spending is projected to account for 40% of global spending in 2024, and is expected to reach 52% in 2024 in developed markets.

New specialty products are increasingly in niche areas, including oncology and orphan drugs. The slowed growth of specialty spending in the projected period is, in part, due to brand losses of exclusivity, including biosimilars, which offset new product contributions. Historically, loss of exclusivity impact was greater on traditional medicines rather than specialty products, making this a notable shift in the 2024 projections.

Additionally, price controls deriving from negotiations and reimbursements with innovative models such as outcomes-based contracts, have been implemented in developed countries to address the growing costs of specialty medicines. While several cell and gene therapies are poised to launch, their impact on spending through 2024 is not expected to be substantial.

Finally, the report projects the following: worldwide, patients can expect to see greater access to medicines; in developed markets there will be more treatment options available for rare diseases and cancer, though they may come at a higher cost to patients in some countries; and in the United States, where medicine costs have shifted to patients, it is likely this trend will continue, though this will be slightly offset by loss of exclusivities.

To read the full report, click here.