The IMS Institute for Healthcare Informatics today reported
that global spending for medicines will reach nearly $1.1 trillion by 2015,
reflecting a slowing compound annual growth rate of 3-6 percent over the next
five years. This compares with 6.2 percent annual growth over the past five years.
Lower levels of spending growth for medicines in the U.S., the ongoing impact of patent
expiries in developed markets, continuing strong demand in pharmerging markets,
and policy-driven changes in several countries are among the key factors that
will influence future growth, according to the IMS Institute’s new study, The
Global Use of Medicines: Outlook Through 2015.
“The future level of spending on medicines has striking
implications for healthcare systems and policy makers across the developed and emerging
economies,” said Murray Aitken, executive director, IMS Institute for
Healthcare Informatics. “Past patterns of spending offer few clues about
the level of expected growth through 2015. There are unprecedented dynamics at
play, which are driving rapid shifts in the mix of spending by patients and
payers between branded products and generics, and across both developed and
pharmerging markets.” In its latest analysis, the IMS Institute identifies
the following dynamics: — Brands accelerate their decline in share of
spending. Whileaging populations in developed markets will continue to drive
incremental spending on brands, this will be more than offset by the impact of patent
expiries. As a result, spending for branded products in developed markets will
remain at the same level in 2015 as in 2010.
Globally, market share for branded medicines, which fell
from 70 percent in 2005 to 64 percent in 2010, is expected to decline further through
2015, to 53 percent. While growth for branded products in the emerging markets
will be robust, 80 cents of every dollar spent on medicines in these markets in
2015 will be for generics.
— Unprecedented level of patent expiries brings
“patent dividend” to developed markets. Expiring patents for branded
products will yield $98 billion in net savings to payers in developed countries
through 2015, compared with $54 billion in savings realized in the five years to
2010. Patent expiries will save payers $120 billion by 2015, offset by $22
billion of expected generic spending for these medicines. Among developed
markets, the U.S. will
experience the largest expansion of generic spending, while Japan will continue to have the
lowest share despite significant policy incentives to increase generic
prescribing and dispensing.
— Novel therapies address unmet patient needs. Recent and
upcoming launches of new medicines will bring important new treatment options to
extend or improve patients’ quality of life. These include: oral medications
for multiple sclerosis with increased efficacy and patient convenience; two
recently launched treatments for arrhythmia that expand therapy options for the
first time in decades; treatments for metastatic melanoma that improve survival
rates; and the first therapeutic prostate cancer vaccine, a breakthrough
advance in personalized medicine.
— Pharmerging markets approach U.S. levels of spending on
Over the next five years, the pharmerging markets are
expected to nearly double their spending on medicines, to $285-315 billion, compared
with $151 billion in 2010. This will be fueled by strong economic growth and
governments’ commitment to expanded healthcare access. The IMS Institute
forecasts that by 2015, the pharmerging markets will become the second largest
geographic segment globally in spending on medicines – surpassing Germany, France,
Italy, Spain and the U.K.
combined, and approaching U.S.
— Health policy decisions affect spending in the long term.
2010 policy decisions that will affect spending for medications during the next
five years include: the passage of the Affordable Care Act in the U.S., which
will expand health insurance coverage to 25-30 million Americans; price
controls in China
to ensure the sustainability of universal coverage; Japan’s first price cut under its
new protected innovative products policy; price reductions to generics and off-patent
products in Spain and Italy; and
mandatory cost-benefit evaluations for new products in Germany.
Additionally, rebates and discounts, which are not reflected in IMS audits, are
being applied more extensively by public and private payers, particularly in
the U.S., France and Germany. The amount of these
off-invoice discounts in 2010 is estimated to be $60-65 billion, and will rise
to $65-75 billion by 2015.
— Biosimilars evolve rapidly, but adoption limited. By
2015, the IMS Institute expects spending on biosimilars to exceed $2 billion annually,
or about 1 percent of total global spending on biologics.
New biosimilars are expected to enter the U.S. market by 2014, and European
markets will see additional biosimilar molecules introduced during this period.
This will accelerate spending for biosimilars over the 2010 level of $311
The IMS Institute also identified the leading therapeutic
classes in 2015. These include: Oncology, which is expected to remain the
leading therapy class but with slowing growth of 5-8 percent as existing targeted
therapies already have been widely adopted; diabetes treatments, where spending
is forecast to be 4-7 percent, driven by the rising prevalence of the disease
and by the uptake of newer oral antidiabetic agents; asthma and COPD
treatments, where growth is expected to slow to 2-5 percent; and lipid
regulators, where spending will fall to $31 billion in 2015 from $37 billion in
Said Aitken, “Over the next five years, we’ll not only
see total spending exceed $1 trillion, but payers will be managing a
significant patent dividend while emerging market governments seek to expand treatment
options to more patients. All of this will require that healthcare stakeholders
engage in a truly meaningful dialogue as they seek the common goal of increased
access, cost reductions and better outcomes.” To access the IMS Institute
report, The Global Use of Medicines: Outlook Through 2015, go to