Drug sales crossed a significant metric last year. They grew past $1 trillion. And for those industry insiders thinking global sales will taper off, a new report says think again. Expect sales to top $1.3 trillion in 2018.
Recent years have been full of reports about the falloff in pharma R&D and what that will mean to drug sales going forward, but there are promising signs in the last 12 months, according to the Thomson Reuters 2015 CMR International Pharmaceutical R&D Factbook. It points to the record 41 FDA new drug approvals in 2014, a 93% approval rate. There were actually 46 new drugs launched last year, which the report says was the highest number in more than a decade.
The growth will be powered by the fact that many of those new drugs are specialty and anticancer drugs, many with orphan designations, and many with eye-popping prices, a trend that continues. Think of Merck’s ($MRK) Keytruda and Bristol-Myers Squibb’s Opdivo. Of course the hep C drugs, Sovaldi and Harvoni, from Gilead Sciences played a significant role in rising drug spending last year, accounting for $12 billion themselves.
The megagrowth in drug sales in the U.S., the world’s single largest market, has already been noted. A recent report from IMS Institute for Healthcare Informatics found that U.S. drug spending alone was up more than $43 billion last year, a record increase. Spending on prescription drugs hit $374 billion in 2014, on a record-setting volume of 4.3 billion prescriptions filled. That translated into a 13% jump overall and 10% per capita, compared with an overall increase of 3.2% in 2013, the IMS Health report notes.
But while the portents are good for pharma in terms of worldwide growth, it is not to say everything looks great. About 95% of drug sales still came from established products that will eventually see their market share gobbled up by generics. Still, “This is an extraordinary year for pharma,” said Basil Moftah, president of Thomson Reuters IP & Science.
By Eric Palmer