IQVIA Projects $192 Billion Loss for Originators by 2028 Thanks to Biosimilar, Generic Competition

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In its most recent edition of its Global Use of Medicines Report, the IQVIA Institute for Human Data Science predicted that losses for originator products will rise from $111 billion to $192 billion by the end of 2028, thanks to market introductions of new biosimilar and generic medicines.

After the World Health Organization declared the end of the COVID-19 public health emergency in May 2023, focus shifted to preventing and treating other diseases. Breakthrough therapies led to higher-than-forecasted medicine use and spending through 2028. The annual report aimed to provide evidence for discussions on the value, cost, and role of medicines over the next 5 years in health care spending.

The Impact of LOE Events on the World

The $192 billion projected impact of loss of exclusivity (LOE) for originator drugs includes $133 billion from small molecules and $59 billion from biologics.

Notable medicines contributing to this impact are primarily US expiries, such as adalimumab (Humira), lisdexamfetamine (Vyvanse) for attention-deficit/hyperactivity disorder, rivaroxaban (Xarelto), and ustekinumab (Stelara), the last of which is expected to see biosimilar competition begin in 2025.

However, given the historical variability in actions taken by originators, payers, and providers in the past, it is uncertain how many patients will transition from originator medications to generics or biosimilars going forward. Despite expected declines for reference drugs, some markets, like adalimumab in the US, have seen an increase in reference drug spending due to low biosimilar uptake.

“The next five years of expiry events will provide critical revenue opportunities for generic and biosimilar makers to sustain their businesses, especially considering the more modest period of expiry events in the past five years, which were historically low levels,” the authors wrote. "Payers’ ability to generate savings from these expiry events will offset novel and inline brand spending and be a key element as health systems and payers work to control the rate of growth in drug spending."

The Impact of LOE Events in the US

Losses of exclusivity in the US are projected to reach $145.5 billion through 2028, significantly impacting spending on both small molecules and biologics.

Small molecule expiries are expected to reduce brand spending by $106 billion, more than double the impact of the last 5 years, particularly in the anticoagulants therapy area.

Biologics are anticipated to result in $39.5 billion in lower originator spending as more products face biosimilar competition. The approval of interchangeable biosimilars for insulins and adalimumab suggests the potential for significant uptake, although questions remain whether interchangeability, alternative formulations, and the strategies of stakeholders will influence biosimilar uptake.

As the biosimilar market grows, IQVIA predicted a $39.5 billion reduction in spending on reference biologics over the next 5 years. This will particularly impact major products like ranibizumab (Lucentis), adalimumab, and ustekinumab.

Overall Findings for Global Spending Growth

Overall, global medicine spending is projected to grow by 5%-8% compound annual growth rate (CAGR), reaching $2.3 trillion by 2028. Despite a decrease in spending on vaccinations and therapeutics, global health systems continue to demonstrate resilience. Global use is expected to grow by 2.3%, reach nearly 3.8 trillion defined daily doses in 2028, a 400 million increase from 2023.

Medicine use has grown across therapy areas since 2018, notably in immunology, endocrinology, and oncology. Per capita utilization of immunology products varies among high-income countries, with biosimilar competition leading to increased use. Glucagon-like peptide 1 agonists—such as semaglutide (Ozempic/Wegovy), dulaglutide (Trulicity), and tirzepatide (Mounjaro)—have rapidly gained popularity in diabetes and obesity, particularly in the US and other high-income nations. Middle- and low-income regions show higher growth in oncology due to expanded access to traditional chemotherapy.

IQVIA broke down some of the big trends to watch over the next 5 years:

• Specialty medicines: will represent about 43% of global spending in 2028; expected to constitute 55% of total spending in leading markets.
• Oncology: anticipated growth of 14% to 17% CAGR through 2028, reaching $440 billion by 2028; growth accelerated by novel drugs will be slowed by biosimilars in later years.
• Immunology: slow growth in the range of 2% to 5% in part due to adalimumab biosimilar entrants in the US.
• Lipid regulators: expected to return to growth after a steady decline, driven by new therapy options.
• Cough, cold, and flu vaccines: projected growth of 5% through 2028.
• Nervous system, musculoskeletal, and mental health treatments: patent expiries offsetting growth from novel therapies.
• Diabetes: projected to reach 78% lower than invoice by 2028, driven by insulin price caps from the US Inflation Reduction Act (IRA), payer negotiations, and increased market competition

Projections for the US

Projected spending growth in the US is expected to be 2% to 5%, primarily influenced by rising originator spending on an invoice basis. This growth is accentuated by increased off-invoice discounts and rebates under the IRA. Off-invoice discounts and rebates, which are anticipated to be 37% lower than invoice levels in 2023, are projected to further decrease to 47% lower in 2028.

The gross to net difference, previously expected to reach 39% in 2026, is now projected to be 2% lower due to the faster-than-expected adoption of novel therapies in oncology, immunology, diabetes, and obesity. Ongoing market dynamics, adoption of newer treatments, patent expiries, and competition from generics or biosimilars will further shape the outlook through 2028.

Spending on medicines in the US at invoice prices is projected to increase by $299 billion through 2028, marking an $81 billion increase compared to the past 5 years. The primary driver of growth is increased usage of existing protected originator products, contributing $322 billion over 5 years.

Generics and biosimilars will have a modest impact on growth due to price deflation offsetting patent expiry events. The contribution from new brands is expected to reach $119 billion with the launch of more than 250 new active substances.

Overall, medicine spending at invoice prices is anticipated to reach over $1 billion by 2028, despite off-invoice discounts and rebates reaching 47%, and net spending increasing by $91 billion during the same time frame.

Reference

Global use of medicines 2024: Outlook to 2028. IQVIA. January 17, 2024. Accessed January 17, 2024.