Medicine use has seen a jump globally-but no telling what effect COVID-19 will have on this trend.
Global medicine spending is expected to exceed $1.1 trillion in the next five years, according to a new report from IQVIA.
The report looks at medicine use trends from 2009 to 2019, so it does not include data related to the current COVID-19 coronavirus pandemic which is currently upending the global healthcare market.
The researchers found that global spending has steadily increased over the studied period with a compound annual growth rate of 4.2 percent with spending reaching $995 billion in 2019; a 23 percent jump from $777 billion in 2014. The increase has continued despite discounts and rebates, showing that net revenue for drug manufacturers is “often much lower than spending at invoice prices.”
The net market size in 2019 is $250 billion lower than invoice spending and the difference is expected to grow beyond $400 billion by 2024 as dynamics driving the disparity, like payer negotiations and subsidies are likely to continue, the report says.
In the U.S., the growth of net prices has slowed from 4.3 percent in 2014 to 0.3 percent in 2018. The growth is expected in the range of -1 percent to 2 percent through 2024, the report says.
The increase in medicinal spending is tied to a global increase in the use of medicines. The report uses a defined daily dose (DDD) as put in place by the World Health Organization, to find 1.8 trillion DDDs in 2019. This is an increase of 16 percent over 2014, and a 3 percent compound annual growth rate.
National income is connected to medicine use, as richer companies typically showed higher rates of medicine use. The U.S., which has the highest net national income per capita at $51,000, is ranked ninth worldwide in DDD per capita with 440. Australia was the highest with 820 DDD per capita, the report says.
The authors say that patients worldwide can expect greater access to medicine, though it may also mean these medicines will come with a high cost. Also, physicians will see expanded treatment options, but will be challenged to adjust to more complex guideline with cost increasingly being a factor to treatment decisions in some areas.
Before the COVID-19 coronavirus pandemic, the Trump administration made lowering prescription drug prices a key part of its healthcare initiative releasing price transparency rules and proposing rules allowing drugs to be imported from Canada last November.