Global medicines spending to rise 30% by 2018 to $1.3 trillion, says IMS

More specialty drug innovation, greater patient access to medicines and reduced impact from patent expiries will be the primary drivers of an increase in global medicine spending of up to 30% by 2018.

The increase in annual spending will spike this year when absolute growth will be about $70 billion, up from $44 billion in 2013 and $26 billion in 2012, according to new research released today by the IMS Institute for Healthcare Informatics.

The report, The Global Outlook for Medicines Through 2018, found that the total global spend for pharmaceuticals will increase by $305-$335 billion on a constant-dollar basis, compared to $219 billion during the past five years. Global spending is forecast to grow at a 4%-7% compound annual rate over the next five years, with most countries experiencing an increase in drug expenditure per capita. Spending is measured at the ex-manufacturer level before adjusting for rebates, discounts, taxes and other adjustments that affect net sales received by manufacturers. The impact of these factors is estimated to reduce growth by $60-$80 billion, or around 25% of the growth forecast over the next five years.

US market growth to remain strong

Growth in the US market will remain strong, disproportionate to its population growth; this is driven by fewer patent expiries than in previous years, innovative product launches and rising prices. In the USA, the largest impact on spending growth will be less impact from patent expiries, further implementation of the Affordable Care Act, an aging population and price increases.