IQVIA has published is annual data on global drug spending trends this year as part of a larger report, “2018 and Beyond: Outlook and Turning Points,” highlighting evolving trends in healthcare and drug utilization practices—which we’ll get to in a moment. Staying with the macro spending trends, the findings include:
- US invoice spending (not included tens of billions in discounts) is estimated at $466.6 billion in 2017, and while the five-year CAGR for 2013-2017 was 7.3%, the forward look (to 2022) is 4-7%, reaching $585-615 billion in 2022. Nevertheless, real net per capita spending on medicines will decline this year and remain relatively flat at roughly $800 per person through 2022. “While setting prices freely has been a unique feature of the US market compared to other countries, the leverage payers have to negotiate net price discounts is effectively offsetting price increases,” opines IQVIA.
- EU spending was $154.4 billion in 2017 and the CAGR through 2022 is 1-4%, reaching $170-200 billion in the last year.
- The “pharmerging” sector (a category invented by IQVIA to include 22 developing countries) is estimated at $269.6 billion in 2017, with a CAGR of 6-9% through 2022, to $345-375 billion. China, which had seen double-digit growth for many recent years, will slow to a 5-8% CAGR.
- The US market went through a “patent cliff” in roughly the 2009-2012 period, followed by a new wave of drug approvals for the next 3-4 years. Now a new dropoff is projected, with a loss of $105 billion over the next five years, with $26.1 billion in 2019 alone. The impact of biosimilars will really kick in in 2019, when $9.4 billion in biologics exclusivity will be lost. However, LOE quickly becomes a lesser factor in following years, with only $2.3 billion lost in 2022.
Dominant trends for how drugs are launched, managed and reimbursed include:
- More emphasis on real-world evidence (RWE), as FDA is expected to issue its first framework for RWE to support regulatory submissions and drug safety monitoring
- More niche biotherapeutics, being launched at a rate of 5-8 per year and including cell-based therapies that “stretch the definition of a ‘drug’ as we know it.” (Some cellular therapies depend on manipulating patients’ own cells, then reinfusing them.)
- Mobile health apps being added to treatment guidelines
- Greater use of telehealth.
However, IQVIA also downplays the impact of outcomes-based contracting, saying that “the administrative burden on all parties will escalate and become prohibitive unless the outcomes are designed to be measurable.”
The full report, from the IQVIA Institute for Human Data Science, is available here.