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Global drug spending — excluding COVID-19 vaccines — is expected to reach an estimated $1.6 trillion by 2025, a new report says.
U.S. spending on medicines will slow through 2025, while global spending will increase 3-6% annually, according to a new report.
Global drug spending — excluding COVID-19 vaccines — is expected to reach an estimated $1.6 trillion by 2025, according to the IQVIA Institute for Human Data Science’s The Global Spending and Usage of Medicines report.
The pharmaceutical spending in the U.S. is forecast to grow 0-3% compounded annual growth rate over the next five years, down from 3% CAGR for the past five years, IQVIA predicts.
Slower projected spending growth can partially be attributed to losses of exclusivity for original brands that will outweigh increased spending on newly launched innovative products. The impact of exclusivity losses will increase to $166 billion over the next five years mostly due to the availability of biosimilars.
The cumulative savings from biosimilars will reach an estimated $285 billion, according to IQVIA.
However, the U.S. remains “remarkably resilient” in spending trends— particularly after 2021 — registering negligible slowdown compared to previous expectations, according to the research firm.
“While the pandemic has been extremely disruptive, the pre-pandemic forces of medicine use and spending remain significant drivers of the outlook, and these forces have only been modestly impacted by the immediate effects of COVID-19,” said Murray Aitken, IQVIA senior vice president and executive director of IQVIA in a press release. “The success of countries around the world in implementing a global vaccination program — unprecedented in speed and scope — will be key to the outlook for all medicine use through 2025 and beyond.”
Total spending on COVID-19 vaccines through 2025 is projected to be $157 billion, largely focused on the initial wave of vaccinations to be completed by 2022.
Meanwhile, the two leading global therapy areas — oncology and immunology — are each forecast to grow 9-12% CAGR through 2025, lifted by significant increases in new treatments and medicine use. Oncology is projected to add 100 new treatments over five years, contributing to a spending hike of more than $100 billion to a total of more than $260 billion in 2025.
Immunology growth is projected to slow from the 17.3% CAGR over the past five years as biosimilars bring lower cost treatments, offsetting growth from volume and drug launches.
Many new therapies are expected in the neurology market including novel migraine therapies, potential treatments for rare neurological diseases, and the potential for therapies for Alzheimer’s and Parkinson’s.