IMS Forecast Predicts Increased Spending on Generics

IMS Forecast Predicts Increased Spending on Generics

Global generic spending is expected to increase from $242 billion in 2011 to between $400 and $430 billion by 2016, according to a July 12, 2012, report by the IMS Institute for Healthcare Informatics.

The report, Global Use of Medicines: Outlook Through 2016, predicted an increase in total annual global spending on medicines from $956 billion in 2011 to nearly $1.2 trillion in 2016. Pharmerging countries—those with less than $1 billion in absolute spending growth from 2012 to 2016—are expected to see the greatest growth in drug purchases, whereas established nations are expected to see smaller gains.

In emerging nations, including Russia, China, Brazil, India, Mexico, South Africa, Egypt, and Pakistan, annual spending on medicines is expected to increase from $194 billion in 2011 to $345 to $375 billion by 2016. Of that increase, generics, OTC medications, diagnostics, and nontherapeutics are expected to account for 83% of the increase, the report stated.

In the United States, $103 billion—about 44%—of spending on brand name drugs in 2011 is expected to shift to generics, according to the report. The growth within global generic spending can be attributed to expirations of several brand name patents, more off-label uses for generics, and growth within emerging countries, according to the report.

Key drugs with patents expiring in the United States between 2012 and 2016 include Plavix (clopidogrel), Singulair (montelukast), Lexapro (escitalopram), Oxycontin (oxycodone), Opana ER (oxymorphone HCl), Nexium (esomeprazole), Cymbalta (duloxetine), Celebrex (celecoxib), Lunesta (eszopiclone), Actonel (risedronate), Abilify (aripiprazole), Gleevec (imatinib), Combivent (albuterol and ipratropium), and Crestor (rosuvastatin).

In particular, manufacturers of small molecule generic medications will see an increase in spending. The transition to generics in developed nations and volume growth in emerging markets are expected to drive the growth, whereas US companies are expected to feel the brunt of patent expirations. In Europe, limits to savings from expiring patents are inducing policy changes that promote greater use of generics while also lowering reimbursement for those products.