Based on invoice price levels, the IQVIA Institute for Human Data Science anticipates that the global medicine market will experience a 3% to 6% compound annual growth rate (CAGR) through 2025. Oncology and immunology are the top two therapy areas globally, and they are expected to grow 9% to 12% CAGR during the same time period, according to the company’s recently released report titled Global Spending and Usage of Medicines: Outlook to 2025.
“Despite the pandemic causing significant disruption to health care systems and the use of medicines in the early part of 2020, the overall impact on medicine use was relatively modest during the year,” says Murray Aitken, IQVIA senior vice president and executive director of the IQVIA Institute for Human Data Science. “This was in part because of significant stockpiling of chronic medicines in advance of movement restrictions and higher demand for some drugs used in the treatment of COVID-19 patients, which offset fewer new therapy starts and delays in treatment. The pandemic reinforced the resilience of the pharmaceutical sector and its adaptability, even in the most challenging of times.”
The report projects that global spending on COVID-19 vaccines is projected to be $157 billion through 2025, “a small amount relative to the human cost and overall economic impact of the pandemic,” he maintains.
“In total, specialty medicines will continue their steady increase as a share of the total drug market, especially in developed markets, where their share is expected to reach 59% by 2024,” he tells AIS Health, a division of MMIT. The report forecasts that more than 100 new cancer drugs will launch by 2025, helping boost spending more than $100 billion to a total of more than $260 billion (see chart, p. 4).
However, Aitken notes that “savings from biosimilars are estimated to reach $285 billion over the next five years, reinforcing the critical role they play in supporting sustainable health systems, expanding access to patients and creating headroom for innovation.…Payers have the opportunity to capture these savings,” as well as ones from increased generic competition to small molecule drugs.
Competition Can Help in Contracting
“In most therapy areas, competition is intensifying among manufacturers, and this can provide opportunities by payers for more aggressive negotiating on price and conditions,” points out Aitken.
“The evolution of the pipeline toward more precision medicines and drugs with orphan designations means payers should be prepared to allocate relatively higher shares of their drug spending towards relatively small segments of their membership,” he says. “At the same time, a growing share of their members can have their diseases treated with relatively inexpensive medicines.”
According to Aitken, “this year’s five-year forecast includes more than the usual amount of uncertainty since the impact of the global vaccination effort and enduring effects of the pandemic are not fully known and could bring unexpected disruption to the medicine supply, health delivery systems and economic growth over the next five years. While we are forecasting 3%-6% CAGR, and the impact of COVID-19 has been relatively modest to date, we will also be monitoring global medicine use closely for any indication of more significant disruption.”
Contact Aitken via Keilani Finley at firstname.lastname@example.org.
This story was reprinted from AIS Health’s monthly publication RADAR on Specialty Pharmacy.