IQVIA Institute for Human Data Science Study: 10 Predictions for Innovation, Spending Drivers and Societal Value of Medicines that Will Transform Global Healthcare in 2018 and Beyond

  • Increasing use of real-world evidence and technology to improve access
    and outcomes from molecule-to-market across entire healthcare spectrum
  • Modest global spending growth of 3-6 percent per year, estimated to
    exceed total cost of $1.44 trillion in 2022 worldwide
  • Short-term drivers of drug value include increasing competition among
    biosimilars and flat per capita spending in the U.S. from offsetting
    discounts and rebates

DANBURY, Conn. & RESEARCH TRIANGLE PARK, N.C.–(BUSINESS WIRE)–According to a new report from the IQVIA™ Institute for Human Data
Science, the types of medicines being developed, the way technology
contributes to health, and how the value of health is calculated are all
changing dramatically.

The study, 2018 and Beyond: Outlook and Turning Points, analyzes
several healthcare trends in which stakeholders and decision makers are
increasingly using real-world evidence and technology to solve the
problems of human health. The Institute’s analysis produced 10
predictions that promise to transform healthcare cost and spending, drug
development and delivery, and approaches to determine the societal value
of medicines.

“This report focuses on the most recent real-world evidence and analysis
to balance emotion and intuition that can sometimes overshadow critical
healthcare decisions,” said Murray Aitken, IQVIA senior vice president
and executive director of the IQVIA Institute for Human Data Science.
“Based on that analysis, we’re convinced these evidence-based
predictions will begin to come to pass later this year.”

2018 Harbingers of Healthcare Transformation

  • FDA to guide the use of Real-World Evidence (RWE) to support
    regulation of medicines:
    In 2018, FDA will issue its first
    framework addressing the potential for RWE to support regulatory
    submissions and drug safety monitoring. As big data gathered in
    real-world healthcare settings becomes more prevalent and robust, it
    is increasingly being used across the entire healthcare system for
    evidentiary purposes. With this shift, regulators will be both enabled
    and challenged to accelerate the pace of their review through new
    data-derived protocols, insights and approaches. It’s expected that
    this evidence, paired with existing clinical trial data, will foster
    more collaborative approaches between life sciences companies and the
    FDA around areas such as trial design and post-market surveillance.
  • Niche biotherapeutics move toward mainstream: From 2018 through
    2022, between five to eight new therapies will launch each year within
    a new generation of cell-based therapies, gene therapies and
    regenerative medicines. This wave of Next Generation Biotherapeutics
    will stretch the definition of a “drug” as we know it. Some are
    engineered for individual patients, while others transform previously
    untreatable or chronic diseases with curative results in a single
    dose. Others upend spending paradigms because they carry an extremely
    high cost per patient relative to traditional therapies. Providing
    access to these clinical advances will be a challenge for governments
    and insurers without methods to determine which patients are eligible
    for treatments, negotiated payments based on outcomes, or ability to
    spread costs over time.
  • Mobile health apps will be added to treatment guidelines:
    Treatment guidelines from major clinical organizations will adopt and
    recommend the use of mobile health apps this year – some already have
    done so. The trend toward developing and publishing hard evidence of
    the value of digital tools and interventions will continue with more
    than 3,500 studies expected through 2022. The emergence of
    well-designed apps and mobile devices has paralleled the development
    of rigorous clinical trial evidence supporting their value. As mobile
    apps are better integrated into provider workflows and supported by
    payer reimbursement, adoption will expand further. These advances
    offer the potential to improve outcomes for patients sometimes at
    near-zero incremental costs. While alignment on the appropriate sets
    of features and safeguards has taken time to develop, there is growing
    consensus and technology innovators are advancing into the field in
    significant numbers.
  • Use of telehealth will expand: Nearly every privately insured
    patient in the U.S. will have some form of access to telehealth this
    year, though few will use it. In 2018, telehealth visits will account
    for 3-3.5 percent of visits, up from 2.6 percent in 2017. Over the
    next five years telehealth will grow between 4 and 7.5 percent of
    visits as patient concerns about being treated by a random doctor are
    outweighed by the dramatically lower copayments offered by their
    insurers. Advocates of telehealth argue that most of the reasons to
    see a provider in person can be supported remotely. For payers,
    concerns about measurable benefits and/or potential fraud are being
    addressed by technology and are outweighed by cost savings relative to
    inappropriate use of emergency or urgent care.
  • Spending on branded medicines will dip: In 2018, net brand
    spending will decline in developed markets by 1-3 percent. This has
    the effect of reducing net spending overall on brands in developed
    markets by approximately $5 billion, to a total of $391 billion for
    this year. Net brand spending will remain flat in the next five years,
    despite the expected entry of new branded medicines. The overall
    impact on payers, however, should be the same in 2022 for brands as it
    was in 2017. Manufacturers will continue to develop and launch drugs,
    but the inherent unpredictability of medicines spending will drive
    continued caution among payers regarding reimbursement and access.
  • Specialty brands will drive growth in developed markets: In
    2018, the $318 billion specialty medicines market will represent 41
    percent of developed market spending, up from $172 billion in 2013. In
    fact, specialty drugs will contribute all of the growth in medicine
    spending in 2018, however, those increases will be offset by spending
    declines in traditional therapies. The growth of spending on specialty
    medicines will be constrained by cost and access controls and a
    greater focus on assessments of value. Despite these trends, specialty
    brands are expected to reach 48 percent of total spending in developed
    markets by 2022.
  • Slower growth across pharmerging markets: Growth in pharmerging
    markets will slow to 7-8 percent in 2018, down from the 9.7 percent
    compound annual growth rate over the prior five years. This will mark
    the third year that growth will be less than 10 percent. The IQVIA
    Institute for Human Data Science defines pharmerging countries as
    those with per capita income below $30,000 and a five-year aggregate
    pharmaceutical growth of more than $1 billion. The share of global
    medicine spending from pharmerging markets rose from 13 percent in
    2007 to 24 percent in 2017. The markets within these pharmerging
    countries are projected to grow by 6-9 percent to $345-375 billion by
    2022, driven by volume changes and the use of generics. Overall, the
    progress of advancing global health will continue, but the gains in
    access to medicine over the past decade will not continue at the same
    pace due to slowing economic growth within this key group of countries.
  • U.S. net per capita spending will stabilize: Real net per
    capita spending on medicines in the U.S. will decline in 2018 and
    continue almost unchanged at roughly $800 per person through 2022.
    Spending will remain flat after factoring in the robust pipeline of
    new drugs, moderating brand price increases of 2-5 percent on a net
    basis (7-10 percent on a list price basis) and the impact of brand
    losses of exclusivity, which will be greater in the next five years
    than the last five. While setting prices freely has been a unique
    feature of the U.S. market compared to other countries, the leverage
    payers have to negotiate net price discounts is effectively offsetting
    price increases.
  • Outcomes-based contracts will play limited role: The basic
    framework for an outcomes-based contract contains a payment schedule
    based on how well a drug does or doesn’t deliver results. The most
    common approach is for insurers to pay less for a drug if it performs
    worse than the reported results from its clinical trial for FDA
    approval and pay more for better results. Under these contracts,
    successful medicines get covered at full price or for proportionately
    less based on unsuccessful patient results. These contracts can drive
    real savings for payers or providers, as well as more predictability
    for overall costs. As the health system gains a greater comfort with
    electronic medical records, as well as wider use of RWE, collecting
    data for these outcome requirements will become easier. However, the
    administrative burden on all parties will escalate and become
    prohibitive unless the outcomes are designed to be measurable.
  • New wave of biosimilar competition and opportunity emerges: In
    2018, $19 billion of current biotech spending in developed markets
    will have competition from biosimilars for the first time. That amount
    is significantly greater than the $3 billion in biosimilar revenue
    that became exposed in 2017, and it adds to the $26 billion already
    facing competition. The new exposure to competition in 2018 is the
    largest single-year change to date and signals the start of the next
    large wave of biosimilars. The benefits of a functioning biosimilar
    market include expanding access and cost savings across public and
    private healthcare systems. While overall it appears that the next
    decade will provide sufficient incentives to encourage biosimilar
    challengers, the greatest uncertainty around biosimilars is whether
    all medicines that can be challenged in the next decade will indeed
    face competition and from how many companies.

The full version of the report, including a detailed description of the
methodology, is available at www.IQVIAInstitute.org.
The study was produced independently as a public service, without
industry or government funding.

About the IQVIA Institute for Human Data Science

The IQVIA Institute for Human Data Science contributes to the
advancement of human health globally through timely research, insightful
analysis and scientific expertise applied to granular non-identified
patient-level data.

Fulfilling an essential need within healthcare, the Institute delivers
objective, relevant insights and research that accelerate understanding
and innovation critical to sound decision making and improved human
outcomes. With access to IQVIA’s institutional knowledge, advanced
analytics, technology and unparalleled data, the Institute works in
tandem with a broad set of healthcare stakeholders to drive a research
agenda focused on Human Data Science, including government agencies,
academic institutions, the life sciences industry and payers. More
information about the IQVIA Institute can be found at www.IQVIAInstitute.org.

About IQVIA

IQVIA (NYSE:IQV) is a leading global provider of information, innovative
technology solutions and contract research services focused on helping
healthcare clients find better solutions for patients. Formed through
the merger of IMS Health and Quintiles, IQVIA applies human data science
— leveraging the analytic rigor and clarity of data science to the
ever-expanding scope of human science — to enable companies to reimagine
and develop new approaches to clinical development and
commercialization, speed innovation and accelerate improvements in
healthcare outcomes. Powered by the IQVIA CORE™, IQVIA delivers unique
and actionable insights at the intersection of large-scale analytics,
transformative technology and extensive domain expertise, as well as
execution capabilities. With more than 55,000 employees, IQVIA conducts
operations in more than 100 countries.

IQVIA is a global leader in protecting individual patient privacy. The
company uses a wide variety of privacy-enhancing technologies and
safeguards to protect individual privacy while generating and analyzing
the information that helps their customers drive human health outcomes
forward. IQVIA’s insights and execution capabilities help biotech,
medical device and pharmaceutical companies, medical researchers,
government agencies, payers and other healthcare stakeholders tap into a
deeper understanding of diseases, human behaviors and scientific
advances, in an effort to advance their path toward cures. To learn
more, visit www.IQVIA.com.

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Contacts

IQVIA Investor Relations
Andrew Markwick, +1-973-257-7144
andrew.markwick@iqvia.com
or
IQVIA
Media Relations
Tor Constantino, +1-484-567-6732
tor.constantino@iqvia.com