As we all recognize by now, drugs and therapeutic agents are mainstream treatments for almost all common and most uncommon diseases. Their price, and their cost-effectiveness, is a source of debate. They tend to be the focus of consumers concerns about health care costs. So they are the subject of a lot of research, including a recent IQVIA report of global trends. (IQVIA report) The firm projects that the global market will exceed $1.5 trillion in 2023, an annual compound growth rate of 3-6% from today. This is slower than the increase over the last five years. The United States will have a high growth rate, where spending will reach around $650 billion in 2023, with Europe and Japan experiencing slower increases, while emerging economies like China and India will also see higher spending growth. Key dynamics across the world include continued use of generics and biosimilars, somewhat smaller branded drug price increases, and higher launch prices for specialty compounds. New product launches are headed upward, as pipelines are more robust than they have been for years, driven by a surplus of capital. Two-thirds of new products are expected to fall in the specialty category, driving that group to over 50% of total spending. Only somewhat mitigating this trend is that 18 or the current top 20 branded drugs will have a generic or biosimilar competitor by 2023.
Some of the most important trends affecting the industry over the next five years include continued development of novel technologies and tools, including gene editing and cell therapies; tropical disease therapy development by non-profit groups; progress on using artificial intelligence and machine learning to speed drug development and lower cost; more use of real-world evidence for indication expansion and payer acceptance; drug companies expanding their direct-to-consumer activities by hiring more so-called patient advocates (makes me barf since all they care about is pushing more drugs for a higher price); greater government regulation of pricing (particularly in the US); more of the small biopharma companies will take their products to market themselves, rather than selling to big pharma (I don’t believe this, people will almost always sell for a quick buck, especially a big quick buck, and avoid commercialization risk); continued scrutiny of opioids and other pain-killing medications. On the one hand, I admire the drug industry; it occasionally develops a great product that does a wonderful job of improving disease outcomes, like the hepatitis C drugs. On the other hand I despise their pricing and marketing tactics. Looks like more of the same on both scores over the next few years.