IMS forecasts global drug spending to increase 30% by 2020, to $1.4 trillion

More than half of the world’s population will live in countries where medicine use will exceed one dose per person per day by 2020, up from 31% in 2005, as the “medicine use gap” between developed and pharmerging markets narrows.

According to new research released today by the IMS Institute for Healthcare Informatics, total spending on medicines will reach $1.4 trillion by 2020 due to greater patient access to chronic disease treatments and breakthrough innovations in drug therapies. Global spending is forecast to grow at a 4%-7% compound annual rate over the next five years.

The report, Global Medicines Use in 2020: Outlook and Implications, found that total global spend for pharmaceuticals will increase by $349 billion on a constant-dollar basis, compared with $182 billion during the past five years. Spending is measured at the ex-manufacturer level before adjusting for rebates, discounts, taxes and other adjustments that affect net sales received by manufacturers. The impact of these factors is estimated to reduce growth by $90 billion, or about 25% of the growth forecast through 2020.