The US and emerging markets will drive growth in the global pharmaceutical market, which is expected to surpass $1.5 trillion by 2023, growing at a CAGR of 3%–6% over the next five years. The US and emerging markets are forecast to have a CAGR of 4%–7% and 5%–8%, respectively. In 2018, global pharmaceutical spending hit $1.2 trillion.

The rise in spending in the US is largely attributed to an uptake in new products and brand pricing, but is simultaneously offset by expiring patents and generics. Chinese spending on pharmaceuticals is also continuing to rise, but despite expected to total $140–$170 billion by 2023, growth is expected to slow down to 3%–6%. Europe is expected to experience an even slower increase of 1%–4%, due to cost-containment policies and decreasing sales growth of new products. Japanese pharmaceutical market growth is projected to decline 3% each year through 2023 to result in 0% growth, in part due to exchange rates and uptake of generics.

In developed markets, new products and exclusivity losses will continue these trends, and product mix will keep steering towards specialty and orphan products. Over the next 5 years, 54 new active substance launches per year are forecast on average, with 67% of launches being specialty projects, which will increase specialty drugs’ share of spending to almost 50% by 2023. However, the impact of exclusivity losses is likely to reach $121 billion over the next five years, with the US taking most of the hit at $95 billion, or 80%.

While the cost of traditional drugs is slowing, oncology, orphan drug and specialty medicines’ prices are continuing to grow rapidly. This is mostly an effect of new drugs being used to treat smaller, more specialized populations, resulting in higher prices. Thirty percent and 45% of novel active substances over the next five years are expected to be for oncology and orphan drugs, respectively.


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