The US pharmaceutical market is forecast to reach a market value of nearly $550 billion by 2020, according to a new report from GlobalData.
According to the company’s latest report, the US pharmaceutical market is forecast to increase from an estimated value of $395.2 billion in 2014 to reach $548.4 billion by 2020, representing a Compound Annual Growth Rate of 5.6 percent. The research and consulting firm’s report attributes this growth to several factors including increasing healthcare expenditure, an aging population, the increasing prevalence of chronic lifestyle diseases such as diabetes and obesity, universal and easy access to reimbursement for pharmaceutical product costs, and the 2010 Patient Protection and Affordable Care Act (PPACA).
“As the PPACA mandates health insurance coverage for all Americans, the US has witnessed increasing use of prescription drugs among individuals who are newly insured or have shifted to insurance plans that offer premium and cost-sharing subsidies. In 2014, spending on prescription drugs amounted to an estimated $275.9 billion, compared with $262.3 billion in 2013,” explains Josua Owide, Director of Healthcare Industry Dynamics, GlobalData. “Around 20 provisions of the healthcare legislation are expected to have a direct or indirect impact on the volume of drug and biologic sales. As many as 32 million formerly uninsured citizens could enter the patient pool, resulting in new business worth $115 billion over a period of 10 years.”
The report also notes that the US Food and Drug Administration’s (FDA) transparent, well-structured and competent regulatory system facilitates the approval of drugs, bolstering market growth. According to Owide, some new initiatives undertaken by the agency to strengthen the review and approval process will benefit the industry. The FDA’s strong patent system attracts research-based companies and positively influences growth.
“In 2014, 41 novel drugs were approved by the FDA, 17 of which were for the treatment of rare diseases. Schemes such as the FDA’s Fast Track Development Program and Breakthrough Designation accelerate the approval of novel drugs and add value to the market by meeting demand more quickly,” said Owide.
For access to the report, click here.
Last updated: 3/17/15; 3:10pm EST