The US pharmaceutical market is forecast to jump in value from $395bn in 2014 to $548bn by the end of the decade, according to research and consulting firm GlobalData.
The company’s latest report finds that this is a Compound Annual Growth Rate (CAGR) of 5.6%, and will be driven by a number of factors.
These include increased healthcare expenditure, an ageing population, the rising prevalence of chronic lifestyle diseases such as diabetes and obesity, universal and easy access to reimbursement for pharmaceutical product costs, and the 2010 Patient Protection and Affordable Care Act (PPACA).
Joshua Owide, GlobalData’s director of healthcare industry dynamics, explained that the PPACA and its amendment, the Health Care and Education Reconciliation Act, continue to have a “substantial impact” on US citizens, and the country’s pharmaceutical industry.
Owide said: “As the PPACA mandates health insurance coverage for all Americans, the US has witnessed increasing use of prescription drugs among individuals who are newly insured or have shifted to insurance plans that offer premium and cost-sharing subsidies. In 2014, spending on prescription drugs amounted to an estimated $275.9bn, compared with $262.3bn in 2013.
“Around 20 provisions of the healthcare legislation are expected to have a direct or indirect impact on the volume of drug and biologic sales. As many as 32 million formerly uninsured citizens could enter the patient pool, resulting in new business worth $115bn over a period of 10 years.”
GlobalData’s report also notes that the FDA’s “transparent, well-structured and competent regulatory system” that facilitates the approval of pharmaceutical products is also consequently bolstering market growth.
Owide continued: “New initiatives undertaken by the FDA to strengthen the review and approval process will be advantageous to the industry. Its strong patent system attracts research-based pharmaceutical companies and positively influences growth.
“In 2014, 41 novel drugs were approved by the FDA, 17 of which were for the treatment of rare diseases. Schemes such as the FDA’s ‘Fast Track Development Program’ and ‘Breakthrough Designation’ accelerate the approval of novel drugs and add value to the market by meeting demand more quickly.”