Drug Spending Worldwide To Hit $1.4 trillion in 2020: IMS
A forecast by the Intercontinental Marketing Services (IMS) Health predicted that by 2020, the world's drug expenses would have reached $1.4 trillion.
This hefty range was predicted by the IMS Health due to an increase in healthcare markets and new, higher-priced drugs for other diseases. This amount is higher by about $1.07 trillion compared to this year's amount, representing a 4 to 7 percent compounded growth rate yearly over the next five years.
At least 225 new drugs are in the process of being marketed within these five years, along with medicines for rare diseases, heart and autoimmune diseases, which will, according to the report, come with exorbitantly expensive price tags.
"We are now getting much more value for every dollar or whatever currency we spend ... because we can get decades' worth of innovation, most of it incredibly cheaply because generics are widely available," said Michael Kleinrock, research director for the IMS Institute.
Health system expansions will also significantly drive drugs spending as these expansions will improve access to generic drugs in developing markets.
The cost, however, will be offset by at least $178 billion due to expiring patents, including $41 billion saved from biologic drugs as cheaper alternatives are becoming more popular.
"Globally, it's all about expanding access in low- and middle-income countries," said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics.
Majority of the world's population still depend on developed markets as their source for medications as, due to the expensive pricing on branded medicines, generic alternatives are popular options. The nine countries the IMS defined as the developed markets, will shell out about $880 billion this 2020.
And by 2020, an expected 4.5 trillion doses of drugs will be dispensed, 24 percent higher than 2015's, and more than half of the world's population will be taking at least one medicine a day.
He cited the markets in Brazil, China, India and Indonesia as examples, saying that they were able to strengthen their health systems and improve insurance coverage.
These countries have billions of residents combined and will account for almost half of the higher volume use of medicines worldwide, yet not exactly on spending growth. This is because despite having higher incomes, most citizens can only afford generic medications. Also, not enough hospitals and clinics have the resources or the trained staff needed to give expensive injectable drugs.
Aside from new drugs, experts also anticipate that patient care will also be affected by technology that can improve the diagnosis of diseases, monitor patients' health and help them adhere to treatment modalities. Some of these technologies may also increase the public's healthcare expenditure.