The recent surge in new drug approvals is one reason why the US market in pharmaceuticals could be worth over $500 billion by 2020, according to a new report from GlobalData.
The increase in value represents a formidable compound annual growth rate of 5.6%. Other mature markets are set to grow much more slowly by comparison, with 1.6% forecast for Germany, 1.3% for Japan and 0.7% for the French market.
Another reason is the Affordable Care Act. Despite including several measures that will hurt balance sheets, the overall impact on financial forecasts for the life sciences industry is expected to be positive. The report’s author Joshua Owide explained:
“…an additional 32 million formerly uninsured citizens becoming potential customers [could result in] up to $115 billion of new business over a period of 10 years.”†
Obamacare is behind last year’s upswing in spending on Rx drugs, as newly insured or better insured Americans started receiving prescriptions, and this trend is set to continue.
A rapidly ageing population and chronic lifestyle-related diseases such as diabetes and obesity are also identified as factors exerting upward pressure on spending in coming years.
The rise in drug approvals is seen as a consequence of structural and systemic improvements at the FDA that are anticipated to benefit the industry.
Schemes such as ‘Breakthrough Designation’ and the ‘Fast Track Development Program’ are thought to have been particularly helpful in speeding up the regulatory process.
Equally important is a strong patent system that will continue to draw in R&D investment, thus positively influencing growth.