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Global drug spending to reach $1.9T by 2027 – IQVIA (NYSE:PFE)

admin by admin
January 22, 2023
in Business Deals


Selcuk1/E+ via Getty Images

The global pharmaceutical expenditure is expected to exceed $1.9T by 2027 based on the list prices, the latest industry report from the drug analytics and contract research organization IQVIA Holdings (IQV) indicates.

The estimate, which excludes the spending on COVID-19 vaccines and therapeutics, marks an increase from ~$1.5T in 2022 and implies a compound annual growth rate of 3% – 6% over the period.

Pandemic impact: The report “The global use of medicines 2023,” prepared by IQVIA’s (IQV) data analytics unit IQVIA Institute for Human Data Science and launched last week, also points to the pandemic’s impact on the global pharma market.

“The outlook for global medicine spending has shifted considerably during the COVID-19 pandemic,” the report notes, adding that the pandemic’s impact on non-COVID drug spending is expected to be largely offset over time.

The firm points out that the COVID-led disruption to care for asymptomatic conditions such as diabetes mainly led to lower non-COVID drug spending, which is forecast to hit a cumulative decline of ~$4B from the onset of the pandemic through 2027.

However, according to the report, demand for COVID-19 vaccines and therapeutics is expected to expand the global pharma market by $500B from 2020 to 2027.

In October, London-based data analytics firm Airfinity projected the COVID-19 vaccine market to decline by about 20% in 2023 to $47B after adding an estimated $60B in global sales last year, in line with 2021. Airfinity expects Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) to lead the vaccine market benefiting from the first-mover advantage as the pandemic moves to an endemic phase.

Geographic expansion: IQVIA (IQV) also predicts that countries in Latin America, Asia, and Africa could dominate the drug volume growth over the period thanks to the combined effect of population growth and expanded access.

The widening access to novel drugs via China’s National Reimbursement Drug List (NRDL) is expected to drive the country’s drug spending growth to over 19% during 2023 – 2027, faster than the 8% volume growth.

However, North America and Europe will see very low growth driven by below-average spending and volumes through 2027, the firm notes, adding that there is a direct relationship between the use of medicines and the direct costs to patients.

Among the developed markets, the U.S. has the lowest per capita DDD volumes, a measure indicating drug consumption, the report said, attributing it to consumers’ high out-of-pocket cost exposure.

In a recent analysis, the healthcare research firm 3 Axis Advisors noted that pharma companies have already raised the prices of about 450 medications in 2023, with Pfizer (NYSEARCA:FPE) and GSK (NYSE:GSK) taking the lead.

Therapeutic area: According to IQVIA (IQV), oncology, immunology, anti-diabetics, and cardiovascular areas will contribute to the largest drug spending in 2027. As demand for cutting-edge therapies continues, cancer drug spending is expected to double from the current level to ~$370B, with an estimated growth of 13% – 16% CAGR during 2023 – 2027.

Meanwhile, the spending growth on immunology is expected to moderate to 3% – 6% due to biosimilars, notably those targeting AbbVie’s (ABBV) blockbuster therapy Humira, which are set for U.S. market entry in 2023.

Despite the upcoming copycats to Humira, once the world’s bestselling drug, AbbVie (ABBV), “investors needn’t panic,” Seeking Alpha contributor Edmund Ingham wrote last week, forecasting product sales for the company through 2030.



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