After years of lacklustre growth, the global pharma sector is heading for a healthier period as annual spending on medicines heads towards $1.2trn in 2016, according to the IMS Institute for Healthcare Informatics.
The 3 to 4 per cent increase expected this year will mark low tide for the sector, with a return to 5 to 7 per cent growth levels more in line with historical pharma growth rates out to 2016, although pharma companies will see "minimal" growth in branded products.
Emerging markets will be the driving force behind the recovery, says IMS, with spending in these countries nearly doubling over the next five years while growth in developed economies will be between zero and 3 per cent through 2016.
Overall, developed markets will decline to 57 per cent of total world spending on medicines - down from 73 per cent in 2006 - thanks to patent expiries, lower spending on branded products and increased cost-containment efforts by payers.
IMS' executive director Murray Aitken notes that the US market for medicines will be 10 points down by the end of the period, from 41 per cent in 2006 to 31 per cent in 2016, while the top five EU markets (the UK, France, German, Italy and Spain) will drop from 19 to 13 per cent over that period and Japan will maintain its 10 per cent share.
Over the next five years, emerging economies will expand by around 10 percentage points to reach 30 per cent of global spending, driven by rising incomes, greater medicine usage thanks to low drug prices, and government treatment access programmes.
In 2016 the US will remain the world's largest drug market, but China will have climbed into the number two position ahead of Japan. Brazil will come in at number four, followed by Germany, France and Italy, with India and Russia breaking into the top 10 at positions 8 and 9 respectively ahead of Canada. The UK and Spain will no longer feature in the top 10.
Meanwhile, the differences in per capita spending will remain stark over the coming years. Countries with sophisticated health systems and economies are predicted to spend around $609 per person in 2016, compared to just $91 among emerging markets, despite efforts by the latter group to cover more of their populations with health insurance and basic medical services.
Generics and other products, including over-the-counter medicines, diagnostics and non-therapeutics, will account for approximately 83 per cent of the increase in developing economies, says IMS.
"The trillion-dollar spending on medicines we forecast for 2016 represents a rebound in growth that will accentuate the challenges of access and affordability facing those who consume and pay for healthcare around the world," says Aitken.
From a global perspective, biologics will make up around 17 per cent of the market by 2016, and seven of the top 10 global medicines will be a biologic by that time. However, IMS does not expect huge growth in biosimilars, noting that "biologics remain protected by patents or market exclusivity in many countries".
By 2016, biosimilars will account for spending of around $4bn-$6bn, or just 2 per cent of the $200bn-$210bn market for biologics.