"Pharmerging Markets" Drive Rx Drug Growth
Drug spending is expected to keep growing fast in countries like China, India and Brazil.
Consumers in emerging markets like China, India and Brazil are expected to drive growth in pharmaceutical spending—meaning the global share of developed but stagnating markets like the US, Europe and Japan will drop. A new report released by the IMS Institute for Healthcare Infomatics forecasts that global spending will increase by $244 billion (5-7%) over the next five years, with the majority in "pharmerging markets"—countries that will see more than $1 billion in growth over the next five years, but where per-capita GDP is less than $25,000. In these countries, rising incomes and generous healthcare policies are projected to allow more people to afford meds. Although the report estimates that drug spending will reach about $121 per person in China, for example, in 2016—still far less than the $892 per person projected in the US—the sheer population size of the developing world will mean any increase has a huge impact. In 2011, 20% of the global spending on medicine was in emerging markets—but that's expected to increase to 30% by 2016. Developing markets, on the other hand, are expected to see a 9% decrease in their market share over the next five years due to a surge of patent expirations and low-cost generic drugs—at least nine major drugs will be losing their patent protections this year in the US alone. Whatever growth is expected to be seen in the American market will likely be due to the new health care law, with drug demands rising as more people become insured.