An average of 45 brand-new drugs will hit markets each year through 2021, according to a new report from the QuintilesIMS Institute for Healthcare Informatics, pushing the world’s gross pharma spend to $1.5 trillion that year.
But as health systems search for ways to pay for a “historically large number and quality of new medicines,” they’ll get some reprieve from more moderate spending increases compared with recent years, according to the Outlook for Global Medicines report.
Global pharma spending is expected to grow at 4% to 7% over the next 5 years, down from 9% each in 2014 and 2015, the report finds. Going forward, the expansion represents a “more sustainable level” for health systems, according to Murray Aitken, senior vice president and executive director of the QuintilesIMS Institute.
“At the same time, the astonishing level of scientific advances for disease treatments inevitably will place ongoing pressure on funding for medicines—requiring value-based assessments that balance patient needs and pricing levels with competing healthcare priorities,” Aitken said.
Predictably, QuintilesIMS says that “pricing, access and priorities will come to the forefront like never before.” That’s no surprise for an industry that has seen pricing come to the fore after high-profile hikes last year triggered a wave of public and political interest in the issue.
Trinity Partners President John Corcoran made a similar point last month after the consultancy released its first drug index. At the time, he said concepts such as “real-world evidence,” “outcomes,” “cost effectiveness,” and “health economics” are expected to play a bigger role than ever in drug launches going forward.
For patients, improvements in cancer treatment will be “dramatic” over the report period, QuintilesIMS says, as new therapies and combos will bring better survival and tolerability. At the same time, better data will help guide coverage decisions.
In the U.S., pharma spending growth is expected to slow from 12% in 2015 to between 6% and 9% annually through 2021. That moderation comes after a surge in spending on new therapies for cancer and hep C, such as Gilead’s pricey but effective Sovaldi and Harvoni brands.
The $1.5 trillion estimate for 2021 is almost $370 billion higher than 2016’s estimated spending before discounts and rebates.