DEVELOPED MARKET BRAND INVOICE AND NET SPENDING 2007-2022
Invoice spending in the developed markets will reach over $650 billion by 2022, while net spending will remain flat
- Over the past five years, branded drug net spending in developed markets has risen from $326 billion to $395 billion. In total, 87% of the $69 billion of net growth has come from the United States.
- In 2018, net brand spending will decline in developed markets by 1-3%. This has the effect of reducing net spending overall on brands in developed markets by approximately $5 billion to a total of $391 billion in 2018.
- While the absolute share of spending from new medicines may be small, control of pricing and access to new drugs is a key point at which payers can influence drug spending trends for the longer term.
BRAND SPENDING GROWTH OF SPECIALTY AND TRADITIONAL DRUGS 2013-2022 IN DEVELOPED MARKETS
Branded specialty drugs will drive all growth in 2018, while traditional growth declines
- The past decade has seen a sustained shift in the focus of new medicines towards specialty pharmaceuticals. These are defined as those medicines treating chronic, complex or rare conditions, among other criteria.
- Specialty share of global spending has risen from 19% in 2007 to 32% in 2017. For the tenth consecutive year, specialty medicine growth exceeded traditional medicines in developed markets. In the ten developed markets, specialty represented 39% of spending in 2017, totaling $297 billion.
- Specialty share in developed markets will continue to rise, albeit more slowly than the last few years, and surpass half of medicine spending in 2022 in the United States and in four out of the five key European countries: France, Germany, United Kingdom and Spain.
NUMBER OF NEXT GENERATION BIOTHERAPEUTICS CURRENTLY MARKETED OR IN LATE-STAGE PIPELINE
The number of Next Generation Biotherapeutics in the pipeline and market is set to rise
- Next Generation Biotherapeutics include the latest generation of cell-based therapies, gene therapies and regenerative medicines.
- In 2018, between five and eight Next Generation Biotherapeutics will be approved and launched and, over the next five years, these therapies will make up 20% of the 40-45 New Active Substances (NAS) projected to be launched each year.
- In most cases, Next Generation Biotherapeutics will have costs approaching or exceeding $100,000 per patient. The challenge both for manufacturers and payers will be to create a new payment and reimbursement paradigm that maximizes access to these new therapies.
PROJECTED GROWTH OF DIGITAL HEALTH PUBLISHED EVIDENCE
Published evidence of digital health will increase over 500 percent through 2022
- In 2018, approximately 340 digital health efficacy studies will be completed and published, continuing the trend of building hard evidence to support digital tools and interventions.
- An acceleration of evidence building will bring an estimated 3,500 studies over the next five years and the incorporation of apps by major professional groups into practice guidelines.
- Alignment on the appropriate sets of features and safeguards for apps has emerged and technology innovators are advancing into the field in significant numbers. Integration with provider workflows that occur in the next five years will be critical to stakeholder adoption.
- The emergence of well-designed apps and mobile devices offers the potential to improve outcomes for patients, sometimes at near-zero incremental costs.
BIOTECH MEDICINE SPENDING (NEWLY EXPOSE D) TO BIOSIMILAR COMPETITION OVER TIME 2016 VALUES US$BN
New wave of biosimilar market opportunity emerges
- Only seven molecules of the 196 currently marketed have faced biosimilar competition to date
- With the total market for biotech medicines reaching $168 billion across developed markets in 2016, heightened interest is being placed on the role of biosimilars, which is set to expand significantly
- In 2018, $19 billion of current biotech spending will become exposed to biosimilar competition for the first time in one or more of the developed markets, significantly greater than the $3 billion that became exposed in 2017 and adding to the $26 billion already facing competition. The new exposure to competition in 2018 is the largest single-year change to date and signals the start of the next large wave of biosimilars
- From 2019 to 2022, another $52 billion is expected to face these dynamics for the first time in developed countries, with the United States representing $37 billion
- By 2027, 77% of current biotech spending will be subject to some form of competition
- The impact on competitive molecule spending ranges from a 10% increase to a 30% decrease, meaning the $71 billion exposed to competition from 2018—2022 could result in $50—78 billion in spending following biosimilar entry in a variety of likely scenarios