Global Medicine Market Outlook 2024–2029: Strategic insights for C-Level Leaders

According to IQVIA Institute’s report “The Global Use of Medicines Outlook through 2029”, the global pharmaceutical landscape is entering a transformative phase. By 2029, global medicine spending is projected to reach $2.4 trillion, growing at a 5–8% CAGR. This growth is supported by sustained innovation, balanced by significant losses of exclusivity (LOE) due to patent expiries, especially in small molecules and biologics, regional dynamics, and evolving payer strategies.

Spending trends vary by region, with North America and Europe leading growth, while Japan remains relatively flat due to pricing policies, and China experiences moderate recovery post-pandemic.

However, the next five years will also be defined by unprecedented patent expiries, intensifying payer cost-containment pressures, and a widening divergence in regional growth trajectories. For C-level leaders, the challenge lies in balancing investment in innovation with navigating structural headwinds.

Global Trends and Market Dynamics:

• Growth Moderates but Remains Resilient: After pandemic-driven volatility, global spending is stabilizing into a more predictable growth path. Innovation, particularly in oncology, obesity, neurology, and advanced therapies, will remain the backbone of expansion.
• The Patent Cliff Intensify: $220 billion in brand value will be eroded globally through 2029 due to loss of exclusivity (LOE), with over $177 billion from small molecules. This represents a tripling of impact versus the prior five years, creating both challenges for originators and opportunities for generics and biosimilars.
• New Brands, Smaller Share: While new medicines are projected to generate higher absolute growth than in the last five years, their share of total brand spending will account for a smaller share of overall brand spending.
• Payer Pressure: Governments and health systems are intensifying cost-containment efforts, with pricing legislation and reimbursement reforms shaping market dynamics. The U.S. IRA legislation, Europe’s health technology assessments, and China’s NRDL negotiations will all shape future profitability.
• Innovation Remains the Primary Engine: New and existing branded medicines in developed markets are driving growth, with over 250 novel active substances (NAS) expected to launch in the U.S. alone.

Regional Market Outlook:

United States

Growth Outlook: Net spending growth forecasted at 3–6% CAGR, down from 6.8% in the past five years, but absolute spending will rise by $344 billion, $54 billion more than the $290 billion increase over the past five years, driven by protected brands and new launches.

Key Drivers:

• The primary growth driver will be greater use of existing protected branded products, contributing $388 billion.
• New brands are expected to add $117 billion as over 250 new active substances (NAS), with strong contributions from oncology, obesity, diabetes, neurology, and gene therapies.

Challenges:

• Losses of exclusivity are projected to rise to $179 billion from $49 billion in the previous five years, as both small molecules and biologic products are increasingly subject to LOE.
• Generics and biosimilars have had limited impact on growth, as price deflation has mostly offset gains from patent expiries
• Legislative headwinds driving net price erosion (-1% to -4%).

Europe (EU4 + UK)

Growth Outlook: European markets anticipate an $85 billion increase in medicine spending by 2029, driven by new and existing brands.

Key Drivers:

• In the next five years, over 200 NAS will launch across top European countries, with new products expected to add $45 billion in spending.
• Protected brands outpacing new launches in absolute growth contribution.
• Over the next five years, one-third of new launches are projected to be cancer drugs, along with significant groups in neurology, including those addressing rare diseases.
• Generics, including biosimilars, are projected to contribute $10 billion in growth over the next five years, which is $2 billion less than the previous period as higher LOEs are balanced by falling prices.

Challenges:

• Payer actions may be influenced by economic growth rates, as well as geopolitical and trade developments, particularly those associated with the United States.
• Generics and biosimilars are projected to contribute $10Bn in growth over five years—a $2Bn decrease from the previous period, due to price deflation offsetting volume gains despite higher LOEs.
• The world’s largest biosimilar market further pressuring margins.
• Heightened scrutiny via health technology assessments and economic pressures will shape access and pricing.

Japan

Flat Growth: Spending growth is expected to maintain a consistent -0.5 to 2.5% growth rate over the next five years as annual price cuts offset gains from innovation.

Market Shifts:

• Shift toward earlier access to novel medicines and rising generic share.
• Protected brands have grown from 50% to 57% of total spending, reflecting earlier launches and expanded access.
• Long-listed products’ share continues to collapse (22% in 2015 to 5% by 2029).
• Generics share of spending is expected to rise driven by government policy incentives.

China

Gradual Recovery: Growth forecast at 1–4% CAGR, driven by original branded medicines, reaching $190+ Bn by 2029, an increase of $24Bn in the next five years.

Key Drivers:

• Spending is almost entirely driven by new original medicines, increasingly from domestic originators.
• Inclusion in the National Reimbursement Drug List (NRDL) will sustain adoption of innovative drugs, though at lower negotiated prices.
• Over the next five years, original brands will grow by 8.0% per year while other types of products will grow at 1% or less, contributing to the overall growth rate  slowing to 1–4%.

Challenges:

• Aggressive pricing negotiations erode margins.
• Non-original brands expected to decline by 0.4% annually, partly as a result of a government focus on reduction spending growth in hospitals.

Latin America

Growth Outlook: Latin America presents a diverse mix of historical and projected market trends, with the largest economies expected to decelerate yet still sustain growth rates above 7% over the forecast period.

Key Dynamics:

• Brazil remains the region’s largest and fastest-growing market, though sustainability concerns may emerge.
• Colombia has a set of economic and policy factors that may change the healthcare landscape, bringing uncertainty.
• Mexico’s growth remains among the slowest of major countries, with added risks from U.S. relations, tariffs, and cross-border economic concerns.
• Argentina offers strong upside potential as it emerges from economic instability.

Eastern Europe

Highest Growth Outlook: 7–10% CAGR, with spending expected to increase 52% over five years, while volume will increase 2%.

Drivers:

• This trend reflects the waning impact of disruptions resulting from the Ukraine conflict, as well as the anticipated adoption of innovative pharmaceuticals, although at a later stage than in Western Europe and other developed markets.

Conclusion

The global medicines market outlook for 2024–2029 presents a complex challenge. While robust growth is expected, the risk environment is becoming more difficult. Projections suggest spending will reach $2.4 trillion by 2029, but the growth patterns will vary significantly across regions and therapeutic areas.

Executives in the sector should focus on several critical priorities:

• Portfolio Strategy: Prioritize investments in innovative products, particularly in specialty medicine, while proactively managing the effects of upcoming loss of exclusivity (LOE) events.
• Geographic Diversification: Shift emphasis toward high-growth markets in Eastern Europe, China, and Latin America, as these regions are positioned for stronger returns compared to more mature U.S. and European markets.
• Payer Engagement: Strengthen relationships with payers and health technology assessment (HTA) bodies, especially in key regions such as Europe and Japan. Tailor approaches to local market dynamics, considering elements like Japanese price controls, China’s National Reimbursement Drug List, and inflationary pressures in Latin America.
• Pricing & Market Access: With increasing global pricing pressure, it is essential to enhance payer engagement, utilize value-based agreements, and implement evidence-driven approaches to market access.
• Innovation and R&D: Accelerate research and development efforts in emerging fields like cell and gene therapies, RNA-based platforms, and new obesity treatments. Prepare commercialization models that fit the unique needs of specialty care.
• Biosimilar Scale-Up: The $220 billion window associated with LOE events opens significant potential for biosimilar expansion, especially in oncology and immunology. Innovators must anticipate competitive pressures and refine pricing strategies to sustain growth.

The leaders who thrive will be those who move with confidence—realigning their portfolios, rethinking market access, and seizing opportunities in both innovation and biosimilars—while staying nimble in the face of constant change.

Source: The Global Use of Medicines Outlook through 2029, IQVIA