The US pharmaceutical market is projected to increase from $354bn in 2015 to $497bn by 2020, according to a report by GlobalData.
Titled ‘CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – US’, the report attributes the growth to aging population, an increase in cost of prescription drugs and mandatory entitlement spending.
The elderly accounted for 14.8% of the total US population in 2016, while the same is projected to increase to 16.6% by 2020. The growth is expected to cause a burden on the healthcare system, while also driving the growth of the future healthcare market.
Wide insurance coverage is also expected to aid industry growth. Approximately 91% of the US population currently has access to health insurance. The majority of citizens above 65 years have coverage through Medicare or Medicaid, private individual healthcare package, or both.
In terms of cost, the existing government policies and structure of the US economy allows pharmaceutical companies to determine the price of drugs, leading to unrealistic price hikes. The cost of Mylan’s EpiPen, for instance, has increased by roughly 400% since 2009.
Major policy changes are expected with the proposed restructuring of the existing Affordable Care Act (ACA) reforms, with the recent election of Donald Trump. The President-elect is expected to replace the ACA with new reforms, although their impact on policy holders is not clear yet.
A number of opportunities still exist for pharmaceutical companies despite the uncertainty, as government spending is projected to increase. US Government forecasts suggest that spending on Medicare and Medicaid will be approximately $1.4t by 2024.