Global Medicine Spending to Reach $2.3 Trillion by 2028 as More Patients Get Access to Better Therapies, Says IQVIA Institute Report

Rhea-AI Summary

The IQVIA Institute for Human Data Science report projects a 2 percentage point increase in growth outlook for global spending and demand for medicines, reaching approximately $2.3 trillion by 2028. This is driven by more patients getting access to new and better medicines, particularly in immunology, endocrinology, and oncology. The report also highlights lower expectations for COVID-19 vaccines and therapeutics, resulting in a $200 billion reduction in eight-year cumulative spending estimates.

Positive

• Global spending on medicines is expected to increase by 38% through 2028.
• The volume use of medicine for specific therapy areas such as immunology, endocrinology, and oncology has been growing since 2018, driven by novel therapies and wider adoption.
• The report projects an increase in the use of medicines in Latin America and Asia over the next five years.
• The global medicine market is expected to grow at 5–8% CAGR through 2028.

Negative

• Lower expectations for COVID-19 vaccines and therapeutics have resulted in a $200 billion reduction in eight-year cumulative spending estimates.

Insights

Market Research Analyst

The revision of the growth outlook for the global pharmaceutical market, particularly with a 2 percentage point increase despite the diminished expectations for COVID-19 vaccines and therapeutics, signals robust industry resilience and adaptability. This resilience is underpinned by the broader access to novel treatments, which is a testament to the industry's capacity to innovate and distribute life-saving medicines. The shift in therapeutic focus towards areas like immunology, endocrinology and oncology suggests a strategic pivot that aligns with evolving patient needs and emerging market demands.

From a market perspective, the accelerated growth in Latin America and Asia implies a strategic opportunity for pharmaceutical companies to invest in these regions, potentially leading to increased market share and revenue streams. However, this also means that companies must navigate diverse regulatory environments and healthcare systems, which can pose both operational and logistical challenges.

Health Economist

The updated outlook for the U.S. market, which projects a 2-5% compound annual growth rate (CAGR) through 2028, reflects a trend towards higher-value therapies. This is indicative of a healthcare system that is moving towards more sophisticated and often more expensive, treatments that may offer better clinical outcomes. While this can be seen as a positive development for patients, it also raises concerns about the sustainability of healthcare spending and the potential impact on insurance premiums and out-of-pocket costs for consumers.

Furthermore, the report's mention of a 38% forecasted increase in global spending on medicine using list prices over the next five years must be interpreted with caution. List prices do not always reflect the actual costs to healthcare systems due to confidential discounts and rebates. Nevertheless, it underscores the upward pressure on healthcare budgets, which may necessitate policy responses to contain costs while ensuring access to innovative treatments.

Pharmaceutical Industry Analyst

The projected 12% increase in global medicine use to 3.8 trillion defined daily doses by 2028 underscores a significant expansion in the pharmaceutical market's volume. This growth trajectory reflects the industry's success in developing and commercializing new medicines that address unmet medical needs. The report's emphasis on the growth of specific therapy areas, such as the use of GLP-1 agonists in endocrinology, suggests that companies focusing on these areas may see higher demand for their products.

However, the reduction in the cumulative spending estimates for COVID-19 vaccines and therapeutics by $200 billion over eight years also serves as a reminder of the market's volatility and the unpredictability of pandemic-related demand. Pharmaceutical companies may need to recalibrate their strategies to account for these changes in demand patterns, which could involve shifting resources away from COVID-19 products towards other therapeutic areas with more stable growth prospects.

• Growth outlook is raised by 2 percentage points despite lower expectations for COVID-19 vaccines and therapeutics
• This increase in growth outlook is driven by more patients getting treated with better medicines, especially in immunology, endocrinology, and oncology
• Medicine use in Latin America and Asia will grow faster than other regions over the next five years
• Global use of medicines grew by 14% over the past five years and a further 12% increase is expected through 2028, bringing annual use to 3.8 trillion defined daily doses
• Global spending on medicine using list prices grew by 35% over the past five years and is forecast to increase by 38% through 2028
• The updated outlook for the U.S. market, using estimated net prices, is being raised by 3 percentage points to 2-5% CAGR through 2028, reflecting higher recent growth and expected further increased patient use of higher value therapies

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)-- Global spending and demand for medicines will increase over the next five years to approximately $2.3 trillion by 2028 as more patients get access to new and better medicines, according to a new report from the IQVIA Institute for Human Data Science titled, “The Global Use of Medicines 2024 – Outlook through 2028.”

This updated projection raises the growth outlook by two percentage points despite lower expectations for COVID-19 vaccines and therapeutics. Overall, global use and spending on medicines is exceeding pre-pandemic growth rates and is expected to continue significantly above these trends through 2028.

“The continued growth in spending is driven by an increase in the volume of medicines, which reflects that more patients globally are getting access to novel medicines with better clinical outcomes,” said Murray Aitken, senior vice president and executive director of the IQVIA Institute for Human Data Science. “Global health systems have demonstrated remarkable resilience in the face of the pandemic, global inflation and regional conflicts, and have moved forward to adopt novel therapies and increase usage overall.”

A few key highlights of the report include:

• Therapy area drivers of medicine use: The volume use of medicine for specific therapy areas has been growing since 2018, with notably high growth in immunology, endocrinology and oncology. These areas of increasing usage have been driven by novel therapies, some first launched several years ago, with their wider adoption having a larger impact than new medicines. In immunology, per capita utilization of products and the type of products used varies across developed countries, with nearly half of immunology biologic volume facing biosimilar competition, leading to increased use. In endocrinology, GLP-1 agonists have seen rapid uptake in both diabetes and obesity, predominantly in the U.S. and other developed markets, raising expectations for future growth with these weight loss breakthroughs. Oncology has seen higher growth in developing regions since 2018, driven by expanded access to traditional chemotherapy, while wealthier countries have been increasing the use of novel targeted therapies.
• Lower expectations for COVID-19 vaccines and therapeutics: COVID-19 continues to have an impact on pharmaceutical markets globally, but at a level much lower than previously estimated. The lower level of vaccinations seen to date and expected through 2028 have resulted in a $200 billion reduction in the eight-year cumulative spending estimates. Countries around the world are now narrowing their priority focus to immuno-comprimised and elderly patients and planning fewer booster shots. As many countries are vaccinating at rates below their pre-pandemic trend, millions are left less protected from preventable diseases.
• Spending and growth by regions and key countries: The global medicine market — using list price levels — is expected to grow at 5–8% CAGR through 2028, reaching about $2.3 trillion in total market size. It is expected that manufacturer net sales will be lower than this due to the impact of confidential rebates, government mandated discounts, and clawbacks. In the U.S. and EU4+UK, list-price growth is projected at 6-9% and 4-7%, respectively, while historic data suggest net payer spending will be about 2-5% for both. Spending and volume growth will follow diverging trends by region. The U.S. market, on a net price basis, is forecast to grow 2-5% CAGR through 2028, an upward adjustment from the prior five-year forecast of -1–2% CAGR. This reflects the improved outlook for novel medicines and the expected early impact from the Inflation Reduction Act. Spending in the five major European countries is expected to increase by $70 billion through 2028, driven by new brands. Latin America, Eastern Europe, and countries in Asia are expected to return to steady growth, outpacing the global market. Japan spending growth is projected to grow -1 to 2% through 2028 as robust brand growth is offset by a shift to annual price cuts.
• Spending in key therapy areas: Oncology and obesity lead growth while immunology spending has slowed due to biosimilar availability and uptake. Many other classes will grow in mid-single digits. Demand for innovative oncology drugs will drive spending in this area to about $440 billion by 2028, more than double the current level, as broader and longer use of therapies – including 100 new drugs expected to be launched during that time – propels a larger share of drug budgets to this area. Global obesity spending is projected to grow 24-27% CAGR, reaching $74 billion in 2028 – up from $24 billion in 2023 – with some scenarios resulting in much higher or lower spending based on countries’ reimbursement decisions, which are evolving rapidly. Immunology growth will slow significantly to 2-5% through 2028 with the arrival of new biosimilars and even with robust volume growth. New therapies in rare neurological disorders, Alzheimer’s and migraine are expected to drive spending growth in neurology.
• Global biotech: Biotech will represent 39% of spending globally and will include both breakthrough cell and gene therapies as well as a maturing biosimilar segment. The spending on global biotech is expected to exceed $892 billion by 2028, with growth slowing to 9.5-12.5% from biosimilar savings. Specialty medicines will represent about 43% of global spending in 2028 and 55% of total spending in leading developed markets. The outlook for next-generation biotherapeutics includes significantly uncertain clinical and commercial successes. Cell and gene therapies register high growth rates driven by wider usage and as many as 50 new therapies over five years, but the high range of scenarios would have them represent 1.5% of global spending in 2028.

About the IQVIA Institute for Human Data Science

The IQVIA Institute for Human Data Science contributes to the advancement of human health globally through timely research, insightful analysis and scientific expertise applied to granular non-identified patient-level data.

Fulfilling an essential need within healthcare, the Institute delivers objective, relevant insights and research that accelerate understanding and innovation critical to sound decision making and improved human outcomes. With access to IQVIA’s institutional knowledge, advanced analytics, technology and unparalleled data, the Institute works in tandem with a broad set of healthcare stakeholders to drive a research agenda focused on Human Data Science, including government agencies, academic institutions, the life sciences industry, and payers. More information about the IQVIA Institute can be found at www.IQVIAInstitute.org.

About IQVIA

IQVIA (NYSE:IQV) is a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry. IQVIA creates intelligent connections across all aspects of healthcare through its analytics, transformative technology, big data resources and extensive domain expertise. IQVIA Connected Intelligence™ delivers powerful insights with speed and agility — enabling customers to accelerate the clinical development and commercialization of innovative medical treatments that improve healthcare outcomes for patients. With approximately 87,000 employees, IQVIA conducts operations in more than 100 countries.

IQVIA is a global leader in protecting individual patient privacy. The company uses a wide variety of privacy-enhancing technologies and safeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. IQVIA’s insights and execution capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behavior and scientific advances, in an effort to advance their path toward cures. To learn more, visit www.iqvia.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240117016673/en/

Nick Childs, IQVIA Investor Relations (Nchilds@us.imshealth.com)

+1.973.316.3828

Trent Brown, IQVIA Media Relations (trent.brown@iqvia.com)

+1.919.780.3221

Source: IQVIA

FAQ

What is the projected increase in growth outlook for global spending and demand for medicines by 2028?

The IQVIA Institute for Human Data Science report projects a 2 percentage point increase in growth outlook for global spending and demand for medicines, reaching approximately $2.3 trillion by 2028.

Which therapy areas have seen high growth in medicine use since 2018?

Immunology, endocrinology, and oncology have seen high growth in medicine use since 2018, driven by novel therapies and wider adoption.

What is the expected increase in the use of medicines in Latin America and Asia over the next five years?

The report projects that the use of medicines in Latin America and Asia will grow faster than other regions over the next five years.

What is the expected growth rate for the global medicine market through 2028?

The global medicine market is expected to grow at 5–8% CAGR through 2028.