Report: Specialty Spending Expected to Rise 52 Percent by 2024

New information from the IQVIA “Global Medicine Spending and Usage Trends” report highlights the expected growth of specialty pharmacy spending by 2024.

“There are significant variations in medication use, spending, and health outcomes globally. This report provides unique and timely measures to inform an understanding of health and policy decisions that affect billions of people,” said Murray Aitken, executive director for the IQVIA Institute for Human Data Science, in the report.

According to the report, adoption of specialty medicines is driving spending increases, as these products currently account for 36% of spending globally. Spending on specialty drugs is projected to account for 40% of global spending in 2024, while specialty spending is expected to rise to 52% in 2024 in developed markets.

Although specialty spending growth remained largely constant at an 11% compound annual growth rate from 2014-2019, it is expected to lessen by 5% to 8% by 2024. These products are often a focal point for payers in developed countries, although these medicines typically affect small populations and have only small volumes of use. Additionally, new specialty products are increasingly in niche areas, such as oncology and orphan drugs.

The report projected a slowed growth in specialty spending due in part to brand losses of exclusivity (LOE), including biosimilars, which offset new product contributions. Historically, the impact of LOE was greater on traditional medicines rather than specialty products.

The adoption of innovative specialty products is driven by oncology and autoimmune therapies in both developed and “pharmerging” markets, and developed markets spent a combined $345 billion on specialty products in 2019, with 30% of that on oncology products.

Autoimmune therapy spending comprised 17% of spending in 2019, while HIV accounted for 8% of specialty products. Unlike HIV, spending on other viral diseases, especially hepatitis C virus, have had treatment volumes peak and are expected to have spending decreases through 2024.

Remaining specialty treatments are in smaller spending therapy areas, including many orphan drugs. Notably, “pharmerging” markets have a greater contribution from older immunology and blood coagulation therapies and less from autoimmune biologics, according to the report. However, oncology spending is projected to nearly double by 2024, indicating some use of newer products.

While specialty spending in “pharmerging” markets is nearly 90% smaller in absolute terms than developed markets, the growth is substantial. It does not increase in share simply because traditional medicines will see comparably rapid growth. “Pharmerging” countries also have slower adoption of innovation, as well as higher use of non-original versions of some medicines at lower costs, according to IQVIA.

“This report also includes updated analyses of historic and forecast spending for key countries and regions, types of medicine products and seeks to explain the key drivers of growth,” Aitken said in the report.

References

• Kleinrock, Michael, and Muñoz, Elyse. Global Medicine Spending and Usage Trends Report. Published March 2020. https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/global-medicine-spending-and-usage-trends.pdf?_=1584990454881. Accessed March 25, 2020.