COVID-19 will be a revenue driver and R&D focus for biopharma, but pre-pandemic factors like patent expiry and emerging markets continue to shape the sector says IQVIA.

The research services and analytics firm made the comments in a report, predicting spending on meds will reach $1.8 trillion by 2026 with a significant contribution coming from COVID-19 vaccine and booster shot sales.

According to the authors, “The total cumulative spending on COVID-19 vaccines since their introduction through 2026 is projected to be $251 billion, largely from the initial wave of vaccinations to be completed by 2022 in most countries.

“In subsequent years, booster shots are expected to be required annually or more often as the limited durability of immunity and the continued emergence of viral variants drive recommendations for additional inoculations.”

Patent loss and emerging markets

Despite the likely revenue contribution from COVID-19 vaccines and medicines over the next few years, IQVIA thinks pre-pandemic trends like patent loss and the emergence of new “pharmerging” markets will continue to shape the drug industry.

For example, the authors predicted the US market will grow 0-3% CAGR over the next five years, down from 3.5% CAGR as a result of reduced price growth and the increased impact of brand losses of exclusivity, including biosimilars.

Similarly, they expect Japan will have flat-to-declining medicine over the next four years as a result of “pricing policies that reward innovative patent-protected brands are expected to continue, coinciding with the ongoing shift to generics for older medicines.”

Elsewhere growth will accelerate according to the IQVIA team, which wrote that in pharmerging markets, absolute growth will be led by China, which is expected to grow at a rate of 2.5-5.5% and add more than $30 billion in annual spending by 2026, driven by greater uptake and use of new original medicines.

Murray Aitken, executive director of the IQVIA Institute for Human Data Science concluded that “While the pandemic has been extremely disruptive to patients and health systems, underlying pre-pandemic trends in medicine use and spending remain significant drivers of the outlook, including the impact of record levels of new drug launches and patent expiries of small molecule and biologic drugs.”

He added that, “The ability of countries around the world to roll out a global vaccination program — overcoming hesitancy from patients and persistent logistical challenges — will be key to the transition to an endemic virus and have widespread impacts on the outlook for all medicine use through 2026 and beyond.”