Global Medicine Spending to Reach $1.8 Trillion in 2026, Including Spending on COVID-19 Vaccines, According to Study by the IQVIA Institute for Human Data Science
December 09 2021 - 8:00AM
Business Wire
- The global medicine market — based on invoice price levels — is
expected to grow at 3-6% CAGR through 2026.
- Medicine use and spending trends have been negatively impacted
by the COVID-19 pandemic but will be more than offset by
incremental spending on related vaccines and therapeutics.
- Global medicine spending will be lifted by stronger pharmerging
market growth through 2026 and offset by slower growth in developed
markets caused by losses of exclusivity for original brands.
- A total of 300 new drugs are expected to be launched over the
next five years to 2026, significantly higher than levels seen on
average during the past decade, and are expected to skew toward
specialty, niche and orphan drugs.
- New product launches in the next five years will result in $196
billion in new spending, largely offset by reductions in brand
spending, with $188 billion due to losses of exclusivity.
- The two leading global therapy areas — oncology and immunology
— are forecast to grow 9-12% and 6-9% CAGR, respectively, through
2026, lifted by significant increases in new treatments and
medicine use and offset by the impact of biosimilars.
- In neurology, many new medicines are expected across a range of
diseases, including novel migraine therapies, potential treatments
for rare neurological diseases and potential therapies for
Alzheimer’s and Parkinson’s diseases.
Global spending on medicines — based on invoice price levels —
is expected to grow at 3-6% CAGR through 2026 to reach about $1.8
trillion by 2026, including spending on COVID-19 vaccines and novel
therapeutics, according to a new report, The Global Spending and
Usage of Medicines, released by the IQVIA™ Institute for Human Data
Science.
The total cumulative spending on COVID-19 vaccines since their
introduction through 2026 is projected to be $251 billion, largely
from the initial wave of vaccinations to be completed by 2022 in
most countries. In subsequent years, booster shots are expected to
be required annually or more often as the limited durability of
immunity and the continued emergence of viral variants drive
recommendations for additional inoculations.
“While the pandemic has been extremely disruptive to patients
and health systems, underlying pre-pandemic trends in medicine use
and spending remain significant drivers of the outlook, including
the impact of record levels of new drug launches and patent
expiries of small molecule and biologic drugs,” said Murray Aitken,
IQVIA senior vice president and executive director of the IQVIA
Institute for Human Data Science. “The ability of countries around
the world to roll out a global vaccination program — overcoming
hesitancy from patients and persistent logistical challenges — will
be key to the transition to an endemic virus and have widespread
impacts on the outlook for all medicine use through 2026 and
beyond.”
A few key highlights of the report include:
- Substantial global market growth from COVID-19 vaccines and
therapeutics: Global spending on vaccines is projected to total
$251 billion over the six years from their first introduction to
2026. Novel therapeutics for the virus will total $58 billion over
the same period, for a total of $309 billion of COVID-19 vaccine
and therapeutic spending. The pandemic will reduce non-COVID
spending by a total of $175 billion over the same period, and the
net increase in spending globally is expected to total $133
billion.
- Pharmerging markets: In pharmerging markets, absolute
growth will be led by China, which is expected to grow at a rate of
2.5-5.5% and add more than $30 billion in annual spending by 2026,
driven by greater uptake and use of new original medicines.
- The U.S. market: On a net price basis, the U.S. market
is forecast to grow 0-3% CAGR over the next five years, down from
3.5% CAGR for the past five years. Historically high numbers of new
products will contribute $114 billion in spending over five years,
up from $93 billion the last five years but representing a smaller
share of the market. The largest drivers of the slowing growth rate
are reduced price growth for brands and the increased impact of
brand losses of exclusivity, including biosimilars, which more than
doubles to $141 billion over five years compared to $57 billion in
the prior five years.
- Japan: The third-largest global market will have
flat-to-declining medicine spending, including the likely shift
from biennial to annual price revisions, which started with
off-cycle price cuts in 2021. Current pricing policies that reward
innovative patent-protected brands are expected to continue,
coinciding with the ongoing shift to generics for older
medicines.
- Europe: Spending in Europe is expected to increase 3-6%
CAGR or a total of $51 billion over the five years to 2026, not
including spending on COVID vaccines and therapeutics.
- Novel medicines: New brands in developed markets through
2026 are projected to increase in absolute spending to $196
billion, up more than 20% over the past five years, and continuing
a historically high period of spending on novel medicines and
largely recovering from the impact of the pandemic. New active
substances launches are also projected to continue at higher levels
than seen in the past decade, with an average of 54-63 per year,
totaling 290-315 for five years through 2026.
- Loss of brand exclusivity and rise in biosimilars: The
impact of exclusivity losses will increase to $188 billion over the
next five years, mostly due to the availability of biosimilars,
which will have greater impact in some countries than small
molecules. The cumulative incremental savings in the years
2022-2026 from new biosimilars will reach an estimated $215
billion.
- Therapy area growth: The two leading global therapy
areas — oncology and immunology — are forecast to grow at 9-12% and
6-9% CAGR, respectively, through 2026, lifted by significant
increases in new treatments and medicine use and offset by the
impact of biosimilars. Oncology is projected to add 100 new
treatments over five years, contributing to an increase in spending
of $119 billion to a total of more than $300 billion in 2026.
Immunology growth is projected to slow to 6-9% from 16.9% CAGR over
the past five years as biosimilars provide lower-cost treatments
and offset growth from volume and drug launches. In addition, many
new therapies are expected in neurology, including novel migraine
therapies, potential treatments for rare neurological diseases and
potential therapies for Alzheimer’s and Parkinson’s diseases.
The full version of the report, including a detailed description
of the methodology, is available at www.IQVIAInstitute.org. The
study was produced independently as a public service, without
industry or government funding.
About the IQVIA Institute for Human Data Science
The IQVIA Institute for Human Data Science contributes to the
advancement of human health globally through timely research,
insightful analysis and scientific expertise applied to granular
non-identified patient-level data.
Fulfilling an essential need within healthcare, the Institute
delivers objective, relevant insights and research that accelerate
understanding and innovation critical to sound decision making and
improved human outcomes. With access to IQVIA’s institutional
knowledge, advanced analytics, technology and unparalleled data,
the Institute works in tandem with a broad set of healthcare
stakeholders to drive a research agenda focused on Human Data
Science, including government agencies, academic institutions, the
life sciences industry and payers. More information about the IQVIA
Institute can be found at www.IQVIAInstitute.org.
About IQVIA
IQVIA (NYSE:IQV) is a leading global provider of advanced
analytics, technology solutions, and clinical research services to
the life sciences industry. IQVIA creates intelligent connections
across all aspects of healthcare through its analytics,
transformative technology, big data resources and extensive domain
expertise. IQVIA Connected Intelligence™ delivers powerful insights
with speed and agility — enabling customers to accelerate the
clinical development and commercialization of innovative medical
treatments that improve healthcare outcomes for patients. With
approximately 77,000 employees, IQVIA conducts operations in more
than 100 countries.
IQVIA is a global leader in protecting individual patient
privacy. The company uses a wide variety of privacy-enhancing
technologies and safeguards to protect individual privacy while
generating and analyzing information on a scale that helps
healthcare stakeholders identify disease patterns and correlate
with the precise treatment path and therapy needed for better
outcomes. IQVIA’s insights and execution capabilities help biotech,
medical device and pharmaceutical companies, medical researchers,
government agencies, payers and other healthcare stakeholders tap
into a deeper understanding of diseases, human behaviors and
scientific advances, in an effort to advance their path toward
cures. To learn more, visit www.iqvia.com.
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Nick Childs, IQVIA Investor Relations (Nchilds@us.imshealth.com)
+1.973.316.3828 Tor Constantino, IQVIA Media Relations
(tor.constantino@iqvia.com) +1.484.567.6732
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