NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, August 14, 2015

So-called pharmerging nations – developing countries where use of pharmaceuticals is growing rapidly – are expected to see the fastest growth in total drug spending over the next three years, making them attractive targets for drug makers. But, big pharma beware: Pharmerging nations’ reliance on lower-cost generics will make it a tricky opportunity to play.

Demand for drugs in pharmerging markets will expand at a compound annual growth rate of as much as 11% through 2018, according to a recent report by the IMS Institute for Healthcare Informatics. While that would be a slight slowdown from the past five years, it’s vastly faster than growth across the major markets in Europe and Japan, where growth is expected to be flat and up to 4%, respectively. Pharmerging markets will account for nearly 50% of absolute growth in drug spending in 2018.