The research and development pipeline for drugs and biologics is experiencing a tremendous surge in innovation, which will come to fruition within the next five years. This surge in prescription medicines will parallel a number of technology-enabled transformations in health care delivery that will dramatically increase access to health care worldwide. This unprecedented expansion both of medicines and care delivery will produce measureable improvements in global health outcomes by 2020. Although there will still be regional disparities, access is narrowing, and India, China, Brazil, and Indonesia will drive most new medication use in emerging markets in 2020.
These are some of the predictions from Global Medicines Use in 2020: Outlook and Implications, a fascinating, information-rich report from the IMS Institute for Healthcare Informatics authored by Murray Aitken, executive director of the IMS Institute and senior vice president of IMS Health, and Michael Kleinrock, the Institute’s research director.
The 40-page report provides a compelling look at how medicine use is changing globally, and what the implications are for payors, providers, and other stakeholders. Broadly, Global Medicines Use in 2020: Outlook and Implications covers:
- Medicine use comparisons in developed and developing nations (which IMS calls the “pharmerging markets”)
- The rising per capita use of medicines in the pharmerging markets
- Global spending on medicines, and the drivers of growth
- Transformations in disease treatments, most notably: hard-to-treat cancers, autoimmune diseases, hepatitis C, heart disease, and rare orphan diseases
- Clinical and technology-enabled transformations in care delivery, and
- Implications for stakeholders.
With unprecedented treatment options, the greatest availability of low-cost drugs, and better use of evidence to inform decision-making about the optimal use of medicines, stakeholders around the world can expect to get more ‘bang for their medicine buck’ in 2020 than ever before.
The report is divided into four sections:
1. Medicine Use in 2020:
This section makes it clear that the gap in average medicine use between developed markets and pharmerging markets is closing, albeit slowly. Access to medicines will increase globally by 2020, but significant differences will continue to exist by country. Total medicine use in 2020 will reach 4.5 trillion doses globally, up 24 percent from 2015. More than half of the world’s population will consume more than one dose of medicine per person per day, up from one third in 2005. This increase will be driven by India, China, Brazil, and Indonesia.
The medicines used in the pharmerging markets will mostly be non-original brands, generics, and over-the-counter medicines, and will account for 88 percent of total medicines used in these regions. The developed markets will continue to use more original branded and specialty medicines per capita. These medicines will represent only 0.1 percent of total volume in the emerging markets, compared to 2 percent to 3 percent in developed markets.
2. Global Medicine Spending in 2020:
Global spending on medicines will reach $1.4 trillion by 2020, an increase of approximately 30 percent from 2015, compared to an increase of 35 percent from 2010 to 2015. This spending will occur mostly in developed markets, with more than half spent on original brands for non-communicable diseases.
However, spending will be offset by patent expiries, mostly small molecules and biologics. Brand spending in developed markets will increase by $298 billion from 2015 to 2020, driven mostly by new products and price increases in the U.S., but it will be offset by an estimated $90 billion in net price reductions. The patent expires will result in $41 billion in savings on biologics, as the biosimilars (which are almost identical to the originals) become more widely used.
Generic medicines will continue to account for the vast majority of prescription drug usage in the U.S, rising from 88 percent to more than 90 percent by 2020.
3. Transformations in Disease Treatment:
By 2020, 943 new active substances will have been introduced since 1996, and most of these will be specialty drugs and biologics. Patients will have greater access to breakthrough therapies for hepatitis C, various cancers, autoimmune diseases, heart disease, and numerous rare diseases. More than 225 medicines will be introduced in the next five years, one third of which will be cancer treatments. In addition, 75 new orphan drugs will be available for “dozens” of therapeutic areas that currently have limited or no available treatments.
The report also points out that transformations will occur in technology, and that smartphones, tablets, apps, and wearable devices will increasingly be used to collect data, connect patients and healthcare providers, and provide payers with new ways to control costs.
4. Implications for Healthcare Stakeholders:
The medicine gap is closing globally, in part because there will be a shift away from “siloed budgeting,” in which drug spending is managed separately from other healthcare costs. The emerging economies will focus more on providing both access and essential medicines to those in need.
Another major change in 2020 will be more performance and outcomes-based contracts and payment systems. Additionally, more healthcare will be delivered via technology by providers other than physicians, including pharmacies and community-based facilities. This will be especially evident in the emerging markets.
Patients will have greater treatment options, especially in cancer and rare diseases, and will be more engaged partners with their physicians. This is partially due to the fact that their financial stake in treatments is rising, as both private and public payers in developed countries increase patients’ required copayments. In the low- and middle-income countries, out of pocket payments will shift to insurance premiums as countries strive to develop universal health coverage.
Given the higher levels of spending on medicines by 2020, manufacturers will see higher revenues. The report is neutral on this fact, but it does point out that this growth will create a “challenge to the sustainability of the pharmaceutical industry.” The authors write that “critical adaptations will be necessary to thrive into the next decade.” Key among these adaptations, they say, will be “listening and providing valuable solutions to the problems their customers face.”
Breakthrough Medicines in 2020:
For those interested in more detail on the breakthrough medicines that will be available in 2020, a must-read section of the report includes pages 23 to 29. Among the highlights:
- Myeloma survival rates will rise above 50 percent if the new treatments are as effective as early trials suggest.
- More than 90 percent of the expected new cancer treatments will be targeted therapies, and one third of them will be for rare cancers deemed orphan diseases.
- Millions of people around the world will receive a “functional cure” for hepatitis C, due to highly effective new treatments with fewer side effects.
- Biologics will be available for severe asthma, chronic eczema, atopic dermatitis, and familial or resistant hypercholesterolemia. The authors note: “The historic presence of treatments for these diseases means payers will have to make decisions about patient access to these new medicines; these will be some of the most high profile discussions of the value of innovative medicines in the next five years.”
About the Authors:
Murray Aitken is senior vice president of IMS Health and executive director of the IMS Institute for Healthcare Informatics, which provides policy setters and decision makers in the global health sector with objective insights into healthcare dynamics. Mr. Aitken is also editor of Health IQ, a publication focused on the value of information in advancing evidence-based healthcare, and he serves on the editorial advisory board of Pharmaceutical Executive. Mr. Aitken holds a Master of Commerce degree from the University of Auckland in New Zealand, and received an MBA degree with distinction from Harvard University.
Michael Kleinrock is research director of the IMS Institute for Healthcare Informatics, where he sets the research agenda for the Institute and leads development of reports and projects focused on the role of biopharmaceuticals in healthcare in the U.S. and globally. Mr. Kleinrock holds a BA in history and political science from the University of Essex, Colchester, U.K. and an MA in Journalism and Radio Production from Goldsmiths College, University of London, U.K.