Updated on 18 March 2015
In 2014, spending on prescription drugs amounted to an estimated $275.9 billion, compared with $262.3 billion in 2013
Singapore: The US pharmaceutical market is forecast to increase from an estimated value of $395.2 billion in 2014 to reach $548.4 billion by 2020, representing a compound annual growth rate (CAGR) of 5.6 percent, according to research and consulting firm GlobalData.
According to the analysis, the growth will be driven by a number of factors, including increasing healthcare expenditure, an aging population, the rising prevalence of chronic lifestyle diseases such as diabetes and obesity, universal and easy access to reimbursement for pharmaceutical product costs, and the 2010 Patient Protection and Affordable Care Act (PPACA).
Mr Joshua Owide, director, healthcare industry dynamics, GlobalData explains that the PPACA and its amendment, the Health Care and Education Reconciliation Act, continue to have a substantial impact on US citizens and the country's pharmaceutical industry.
Mr Owide remarked, "As the PPACA mandates health insurance coverage for all Americans, the US has witnessed increasing use of prescription drugs among individuals who are newly insured or have shifted to insurance plans that offer premium and cost-sharing subsidies. In 2014, spending on prescription drugs amounted to an estimated $275.9 billion, compared with $262.3 billion in 2013.
GlobalData's report also notes that the US Food and Drug Administration (FDA) provides a transparent, well-structured and competent regulatory system to facilitate the approval of pharmaceutical products and consequently bolster market growth.
Mr Owide mentioned that new initiatives undertaken by the FDA to strengthen the review and approval process will be advantageous to the industry. Its strong patent system attracts research-based pharmaceutical companies and positively influences growth.
"In 2014, 41 novel drugs were approved by the FDA, 17 of which were for the treatment of rare diseases. Schemes such as the FDA's Fast Track Development Program and Breakthrough Designation accelerate the approval of novel drugs and add value to the market by meeting demand more quickly."