NEW YORK (REUTERS) - Global spending on medicines will reach US$1.4 trillion (S$2 trillion) in 2020, driven by increased healthcare access in emerging markets and high-priced new drugs for cancer and other diseases, according to a forecast by IMS Health released on Wednesday (Nov 18).
That is up from about US$1.07 trillion this year, representing a compound annual growth rate of 4 to 7 per cent over the next five years, the "Global Medicines Use in 2020" report compiled by IMS Institute for Healthcare Informatics found.
Some 225 new drugs will come to market over the next five years, about a third aimed at cancer, as well as medicines for rare diseases, which can carry ultra-high price tags, and treatments for autoimmune diseases and heart disease, the report said.
The cost will be partially offset by patent expirations expected to reduce spending on branded medicines by US$178 billion, including $41 billion from biologic drugs as cheaper biosimilars become more widely adopted, the report forecast.
Health system expansions in developing markets, leading to significantly increased access to cheap generic drugs, will also drive spending in 2020, according to IMS, which provides prescription drug use data for the pharmaceutical industry.
By 2020, 4.5 trillion doses of medicine will be dispensed, up 24 per cent from 2015, with the average cost just 30 cents a dose, IMS estimated. Over half of the world's population will consume at least one medicine per person per day, up from one third of the world in 2005, growth led by India, China, Brazil and Indonesia, the report predicted.
"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.
Developed markets will still account for the lion's share of global spending, about 63 per cent, due to higher prices and access to the newest, most expensive treatments. The nine nations IMS defines as developed pharmaceutical markets will spend about US$880 billion in 2020, an increase of nearly US$300 billion over the next five years, with the United States accounting for some US$575 billion.
By 2020, IMS forecasts 36 million people will have been treated with new medicines for hepatitis C, such as Gilead Sciences' Harvoni, that virtually guarantee a cure for the serious liver disease.
China, the largest emerging market, will spend about US$165 billion in 2020 despite slowing growth.