IMS’ Long discusses future of Rx drug marketplace

Doug Long, IMS Health VP industry relations

Specialty pharmacy continues to dominate, but new trends are emerging, according to IMS Health VP industry relations Doug Long in an Insight Session Sunday morning that looked at the state of U.S. spending on prescription drugs and the future of the marketplace.

As of May 2016, moving annual total spending had grown 9.9% over full-year 2015 spending, reaching $438 billion. Brand spending on traditional medicines contributed about $21 billion. About 36% of total spending was attributed to specialty products, and about 6% went to generics — a far cry from 2012 when generics made up 28% of all drug spending.  

These numbers, according to Long, reflect two trends: a large amount of innovation is being seen in the pharmaceutical space, with 943 new active substances expected to launch by 2020. At the same time, the number of traditional drugs losing their patents is shrinking, and opportunities will be few and far between by 2020, Long said.

“When you get to 2019 to 2020, the generic opportunities start to dry up. There will be fewer loss of exclusivity in small molecules than [the first few years of the 2010s],” Long said. “What’s happened is we’re starting to run out of generic small-molecule opportunities, and innovation has come back.”

Alongside the lack of expiring small-molecule patents comes the expected advent of biosimilars. The first biosimilar launched last year, with two launches expected this year, and that may just be the beginning as companies develop less costly alternatives to pricey biologic drugs — biosimilars save an estimated 15% to 30% on biologics. But the biosimilars market will not look like the generics market, Long said.

“The biggest pipelines in biosimilars are held by brand companies, so this is going to be a brand market,” Long said. “It’s not going to be anything like the small-molecule generic business.”

As these changes take place, demand for prescriptions is increasing, with an additional 42.4 million prescriptions being filled for the year-to-date as of May 2016. IMS Health predicted an overall increase of 1.8% to 2.2% in total prescriptions by the end of the year, with the expectation that retail and mail-order pharmacies will likely exceed the average increase.