IMS Drug Report
For many years drugs were fingered as a prime suspect in ongoing health care spending increases, but drug costs have leveled off as brand names lost patent protection and were replaced by generics and there were fewer new drug introductions. An IMS report examines the outlook for prescription drugs through the year 2016. (IMS Report) Annual global spending in 2016 is projected to be $1.2 trillion, up from about $956 billion in 2011. These are pre-off-invoice discounts, which may be 15% of the top-line number. Spending growth in dollars is expected to accelerate up to 2016, largely driven by higher spending on biologics and other specialty products and by growth in spending in emerging economies. Developed countries will account for 57% of global spending in 2016, while the share for emerging countries will rise to 30%. The US share will decline from 41% in 2006 to 31% in 2016, reflecting much higher generic use and the rise in medical spending in other countries. On a per person, purchasing power adjusted basis, however, the US will be spending almost ten times as much as countries like China and India.
The top 20 therapy areas will account for almost 42% of spending, with cancer drugs by far the single top category, at about 8% of the total. Other top areas include diabetes drugs, asthma, lipid regulators and autoimmune compounds. Brand spending is projected to rise from $596 ion 2011 to about $630 billion in 2016, while generic spending almost doubles from $242 billion to $415 billion. IMS is projecting only a very small volume of biosimilar sales. IMS is anticipating a sharp increase in introduction of new molecular entities, up to 37 a year through 2016 and many of these will be innovative treatments for diseases which currently have few, if any, drugs available. Oncology also will continue to be a focus of drug approvals. For drug companies, the developing world is becoming more important, as is the ability to deliver new biologics and specialty drugs, which command higher prices.