The biggest drivers of growth are likely to be cancer drugs and those that target hypertension and mental health.
As per the findings of a report released by QuintilesIMS Holding, the market for prescription drugs is set to grow in the range of 4% to 7%. The long term forecast sees the market touch $610 billion in 2021.
Earlier, QuintilesIMS, which compiles data for the pharmaceutical industry, had forecast an average spending growth of 6% to 9% through 2021. It has now revised its projections due to rise cost pressures and competition faced by drugmakers and fewer approval of new medicines in 2016 in comparison to the years.
Of late, the pharmaceutical industry has come under increasing pressure from insurers and politicians over the cost of many branded medicines, as a result many drugmakers have pledged to limit the annual price hikes to less than 10%.
“We’re forecasting moderation in pricing reflecting what … we expect will be a continuing trend of single-digit price increases,” said Murray Aitken, the executive director of QuintilesIMS.
Some of the expenses for new medicines are likely to be offset by increased usage of generics. Many prescription drugs are set to lose their patent exclusivity in the coming months. Furthermore, many biosimilars, less expensive versions of the pricey prescription drugs, are also set to enter the market.
The U.S. FDA has approved only 22 new medicines last year in comparison to the 45 it approved in 2015.
QuintilesIMS sees the approvals picking up in 2019 and beyond and estimates that 40 to 45 new brands are likely to be launched from 2019 through 2021. Its estimates are based on the review of experimental medicines that are in the drugmaker pipelines.
As per the report, more than 2,300 new products are in their late stage of development, including 600 drugs to treat various types of cancer, which typically command high prices.
“Numbers (of approvals) are already running well ahead of where they were a year ago,” said Aitken.
In 2016, U.S. spending on prescription drugs have increased by 5.8% over 2015 levels to touch $450 billion based on list prices. If discounts and rebates have to be factored in, this figures climbs down to 4.8% to $323 billion.
The biggest drivers of growth for prescription medicine comes from the chronic therapeutic sectors such as hypertension and mental health.