Despite some significant recent progress in terms of therapeutic innovation, the biopharmaceutical industry is experiencing persistent challenges associated with a broad set of macro-factors including energy shocks, geopolitical instability, interest rate hikes, and cost of living challenges. Generics have driven strong volume growth in the global prescription medicines market in recent years, but innovative medicines face challenges: their 3-year volume compound annual growth rate (CAGR) is just 1% (figure 1),
and their total annual volume is yet to recover to 2019 levels. This struggle is also reflected in the lower uptake of newly launched innovative products, where median sales are well below those of pre-pandemic launches in the eight major markets combined (figure 1).
However, the global prescription medicines market grew in value by 10% at list prices in the year to Q1 2024. Biologics, which contribute relatively low volume but high value to the overall market, were the main driver of this value growth – these are predominantly specialty biologics used to treat oncology and immunology indications, but there is also a significant contribution from biologics used to treat type 2 diabetes and weight loss (1).
Specialty treatments and biologics are driving new medicine technology, which in turn will drive investment into future capacity for CDMOs.
Looking ahead to spending on prescription medicines in the coming years, IQVIA projects that total spending in the EU4 & UK will increase to $296bn in 2028 (figure 2). New brands will be the biggest driver of this increase, and existing brands will also add a substantial contribution, while products which lose exclusivity will negatively affect spending much more than previously. CDMOs should therefore expect to balance manufacturing demands for both new and existing products, but also be aware of brands that will lose exclusivity and the consequent potential need to pivot to products that are in greater demand.
Spending on medicines is directly linked to volume use of these medicines, which is growing faster in some regions than others (figure 3).
These fast-growing regions are areas that will attract investment and innovation: for example, relative to 2018, medicine use in 2028 is forecast to be particularly high in Latin America and many Asian markets. The regions with steadier growth include many of the higher-income countries – a trend which is typical of more established healthcare systems. For a CDMO considering where to set up a new manufacturing facility, there are many factors to balance, such as cost, and the ability to supply growing markets, especially in light of the persistent and escalating supply chain issues around the world, including near-shoring. Samsung Biologics, a large CDMO based in South Korea and therefore well-positioned to supply Asian markets, completed its fourth manufacturing plant last year and is currently constructing its fifth (3).
The distribution of clinical trials indicates which medicines are likely to enter the market in the near future. Oncology accounts for a particularly high proportion of clinical trial starts (figure 4), and many now are for novel mechanisms, including cell and gene therapies, antibody-drug conjugates and multi-specific antibodies. For immunology, while growth is decelerating the pipeline remains very active, and innovators will increasingly look for untapped potential in smaller immunology indications (4).
Together, oncology, immunology, cardiovascular and neurology account for almost 80% of all clinical trial starts, and manufacturers should therefore ensure that their facilities are set up to produce these new products as they gain approval and enter the market.
For obesity agents, the number of clinical trial starts rose by 68% from 2022 to 2023 (5), and of the 148 obesity assets in development, only three have entered the market (6), which underscores the rapid expansion that this indication is experiencing. It is only recently that obesity agents have managed to deliver meaningful efficacy, and in addition, Novo Nordisk’s SELECT trial for Wegovy demonstrated the associated cardiovascular benefits.
Global spending on obesity has grown almost sevenfold in the last three years, and is forecast to accelerate further, potentially reaching up to $131bn by 2028 (2).
With 25% of the world’s population estimated to have obesity by 2035 (7),
meeting the needs of even a fraction of these people will require a huge increase in manufacturing capacity for GLP-1s and other obesity agents. Demand for these medicines has already been outstripping supply, and innovators are searching for increased capacity, as illustrated by Novo Nordisk’s acquisition of Catalent. There is, therefore, great opportunity for CDMOs here, in both the on-patent and off-patent spaces.
In addition to new products, future innovation will include new treatment modalities and platforms. CDMOs and other life sciences organisations should be aware of developments in the following fields:
- Vaccines – with COVID-19 came the first mRNA vaccines, and the current vaccine pipeline includes many mRNA vaccines, some of which are therapeutic cancer vaccines (8).
- RNA therapeutics – as well as mRNA vaccines, there has been great activity around RNA technology more broadly, especially since 2016. Many products are being developed and approved, including the world’s first CRISPR-based therapy in 2023 (9).
- Cell and gene therapies – these life-changing therapies are attracting growing interest, with record funding, clinical research and new launches in recent years (10).
- Radioligand therapy (RLT) – this new treatment modality holds great promise for cancer care. For advanced prostate cancer, for example, RLT already has proven clinical benefits, and its potential to treat other advanced cancers is being investigated (11).
- Microbiome therapeutics – an individual’s microbiome is closely linked to their overall health, and innovators are exploring its therapeutic potential, primarily for autoimmune diseases, oncology, and C. difficile infections (12).
- Differentiated devices – demand for differentiated devices will increase with 1) the rising demand for obesity medications and 2) growing medicine volume use as more biosimilars enter the market.
Some CDMOs may already be aware of these areas, but will need to develop their knowledge, capabilities and strategies accordingly.
Overall, value growth in the biopharmaceutical industry is strong, and in the coming years spending increases will be driven particularly by new brands. Many of these will be treatments for oncology, immunology, cardiovascular and neurology indications, but obesity is the stand-out growth area due to the combination of increasingly high unmet need and great innovation, resulting in huge manufacturing demand.
In addition to new products, novel areas of research and platforms, such as cell, gene, RNA and microbiome therapeutics, will play a role in shaping the future market.
For CDMOs, taking into account innovators’ areas of focus will enable not only timely preparation to meet evolving manufacturing requirements, but capitalisation on the opportunities of the future.
Figure 1. Trends in global prescription medicine volume and innovative launch uptake.
Notes: Excludes vaccines. SU = standard units. CAGRs are shown for Rx volume. Spending calculated at constant exchange rate.
*Pre-COVID launches: 2017-2019. Post-COVID launches: 2020-H1 2023. Excludes Hepatitis C and COVID-19 products. Top eight countries defined as US, EU4 & UK, Japan, China.
Sources: IQVIA EMEA Thought Leadership; IQVIA MIDAS Q1 2024.
Figure 2. Spending and growth drivers for medicines in the EU4 & UK (2018-2028).
Note: Spending calculated at constant exchange rate.
Source: Global Use of Medicines 2024: Outlook to 2028 – IQVIA Institute for Human Data Science, January 2024 (2).
Figure 3. Historic and forecast trends in regional medicine use, relative to 2018.
Source: Global Use of Medicines 2024: Outlook to 2028 – IQVIA Institute for Human Data Science, January 2024 (2).
Figure 4. Clinical trial starts for each therapeutic area, phases I to III, 2014-2023.
Notes: Includes drugs with an active research programme, with phase determined by the highest phase of research regardless of indication. Includes industry-sponsored, interventional trials. COVID-19 includes any trials which mention COVID-19 and could include repurposing of existing therapeutics. See original source for further notes.
Source: Global Trends in R&D 2024: Activity, Productivity, and Enablers – IQVIA Institute for Human Data Science, February 2024 (5).
REFERENCES AND NOTES
- IQVIA MIDAS data, Q1 2024; IQVIA EMEA Thought Leadership analysis.
- IQVIA (2024). The Global Use of Medicines 2024: Outlook to 2028. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/the-global-use-of-medicines-2024-outlook-to-2028
- Samsung Biologics (press release, 2023). Samsung Biologics accelerates timeline of new fifth plant to be operational by April 2025. https://samsungbiologics.com/media/company-news/samsung-biologics-accelerates-timeline-of-new-fifth-plant-to-be-operational-by-april-2025
- IQVIA (2024). Seeking new horizons: Where innovators find opportunities in a fast-changing immunology landscape. https://www.iqvia.com/blogs/2024/03/seeking-new-horizons-where-innovators-find-opportunities-in-a-fast-changing-immunology-landscape
- IQVIA (2024). Global Trends in R&D 2024: Activity, productivity, and enablers. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/global-trends-in-r-and-d-2024-activity-productivity-and-enablers
- IQVIA EMEA Thought Leadership analysis.
- IQVIA (2024). 2024: The obesity market’s inflection point? https://www.iqvia.com/blogs/2024/02/2024-the-obesity-markets-inflection-point?
- IQVIA (2023). Race for Immunity: Exploring the Evolving Landscape of the Vaccines Market. https://www.iqvia.com/library/white-papers/race-for-immunity-exploring-the-evolving-landscape-of-the-vaccines-market
- IQVIA (2023). RNA Therapeutics: Rewriting the script of medical treatments. https://www.iqvia.com/blogs/2023/11/rna-therapeutics-rewriting-the-script-of-medical-treatments
- IQVIA (2024). Strengthening Pathways for Cell and Gene Therapies: Current State and Future Scenarios. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/strengthening-pathways-for-cell-and-gene-therapies
- IQVIA (2023). Succeeding with Innovation: The State of Radioligand Therapy Readiness in Europe. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/succeeding-with-innovation-state-of-radioligand-therapy
- IQVIA (2023). Bigger on the Inside: The Expanding World of Microbiome Therapeutics. https://www.iqvia.com/library/white-papers/bigger-on-the-inside-the-expanding-world-of-microbiome-therapeutics
