Market Dynamics and Financial Trajectory in the Specialty Pharmaceutical Sector: Insights and Forecasts
Introduction
The specialty pharmaceutical market has been a significant driver of growth in the healthcare industry, with various therapeutic areas experiencing rapid expansion. To understand the market dynamics and financial trajectory, particularly for drugs like those in the specialty sector, it is crucial to analyze recent trends, forecasts, and key drivers.
Current Market Trends
Specialty Pharmaceutical Growth
The specialty pharmaceutical market has seen substantial growth, with unadjusted prescription sales ranging from $3.6 billion in 2021 to $3.8 billion at the end of 2023, and a year-to-date growth rate of 4.8%[1].
Leading Therapy Areas
Immunology, oncology, and diabetes have been the top areas driving this growth. Immunology and antithrombotics are leading in long-term growth, while vaccines are at the forefront for short-term growth. Oncology, in particular, is expected to remain the largest therapy area between 2012 and 2028[1].
Top Growth Areas
Recent Growth in Key Products
The top 8 specialty products have shown vigorous growth, with notable increases in sales for drugs like semaglutide (Wegovy) with a 258.3% jump, upadacitinib (Rinvoq) with a 248.6% increase, and risankizumab (Skyrizi) with a 141% rise[1].
Top 10 Therapy Areas
The top 10 therapy areas, including antidiabetes, immunology, oncologics, respiratory agents, antithrombotics, HIV antivirals, vaccines, mental health, multiple sclerosis, and ADHD, are growing at a rate of 15.7% and account for 72.8% of the specialty market share[1].
Market Segmentation
Branded vs. Generic Medications
Generic prescriptions make up the majority of dispensed prescriptions (90.5%-90.6%), while branded medications account for the highest percentage of total dollars spent (81.1%-88.4%)[1].
Biologicals and Biosimilars
The combined biological/biosimilar market accounts for 40.5% of total 2023 sales, with biologicals without a launched biosimilar making up 78%, biologicals with a launched biosimilar at 19.6%, and biosimilars at 2.4%. Biosimilar launch and uptake are expected to reach between $40 billion and $49 billion by 2027[1].
Financial Trajectory
Net Drug Spending
Net drug spending in the U.S. has risen by 20% over the past 10 years, with an average annual growth rate of 2%. Manufacturer net revenue has grown by 5% over the same period[3].
Forecasted Growth
The U.S. market is forecasted to grow at a compound annual growth rate (CAGR) of 1% to 2% over the next 5 years, down from the 4% CAGR seen over the previous 5 years. Sales in immunology, oncology, neurology, and COVID-19 vaccines will be the primary drivers of market growth through 2026[1].
Drivers of Growth
Innovation and Competition
Innovation has led to a packed market with fierce competition, especially in oncology. This competition is expected to slow growth in oncology and lead to a drop in diabetes spending, particularly in the U.S.[1].
Biosimilars Impact
Biosimilars have accounted for 24% of competitive molecule volume since Q1 2015. The percentage of the biologics market accessible to launched biosimilars has fluctuated but is expected to increase, impacting the growth dynamics of biologicals[1].
Challenges and Opportunities
Drug Shortages
Post-COVID-19 pandemic launches have seen lower first-year average gross sales compared to pre-pandemic levels. However, areas like immunology, anti-infectives, and central nervous system medications continue to see significant launches[1].
Quality Assurance and Demand
The global market for quality-assured drugs, particularly in areas like tuberculosis, faces challenges due to sporadic demand and the need for reliable demand forecasting. Manufacturers are incentivized to produce quality-assured drugs only if they see a growing market for such products[4].
Key Takeaways
- The specialty pharmaceutical market is driven by strong growth in areas like immunology, oncology, and diabetes.
- Branded medications dominate in terms of dollars spent, while generic prescriptions make up the majority of dispensed prescriptions.
- Biosimilars are expected to play a significant role in the market, with forecasted growth reaching between $40 billion and $49 billion by 2027.
- Innovation and competition are key factors influencing market dynamics, with a forecasted slowdown in growth rates over the next 5 years.
- Quality assurance and reliable demand forecasting are crucial for maintaining a sustainable market for specialty drugs.
FAQs
What are the leading therapy areas driving growth in the specialty pharmaceutical market?
The leading therapy areas include immunology, oncology, and diabetes, with immunology and antithrombotics leading in long-term growth and vaccines leading in short-term growth[1].
How has the biosimilar market impacted the specialty pharmaceutical sector?
Biosimilars have accounted for 24% of competitive molecule volume and are expected to increase their market share, influencing the growth dynamics of biologicals[1].
What is the forecasted growth rate for the U.S. specialty pharmaceutical market over the next 5 years?
The U.S. market is forecasted to grow at a CAGR of 1% to 2% over the next 5 years, driven primarily by sales in immunology, oncology, neurology, and COVID-19 vaccines[1].
Which products have seen the most vigorous growth in the specialty pharmaceutical market?
Products like semaglutide (Wegovy), upadacitinib (Rinvoq), and risankizumab (Skyrizi) have shown significant growth, with increases of 258.3%, 248.6%, and 141%, respectively[1].
How does the generic vs. branded medication landscape look in the specialty pharmaceutical market?
Generic prescriptions make up the majority of dispensed prescriptions, while branded medications account for the highest percentage of total dollars spent[1].
References
- Diving Deep Into Specialty Pharmacy: Insights and Forecasts From IQVIA's Doug Long. AJMC.
- Order The CIDA REPORT™ - CID Analytics, LLC.
- Drug Expenditure Dynamics 1995-2020: Understanding Medicine Spending in Context U.S. IQVIA.
- Global Systems for the Purchase and Delivery of TB Drugs. NCBI.
