Economic studies


Latin America
Northern America
Central & Eastern Europe
Western Europe
Mid-East & Turkey
Change sector


  • Development of health coverage systems globally
  • Robustness of US demand
  • Demographic and lifestyle changes
  • Pressure for access to innovation


  • Quality problems with certain active principles in India and China
  • Payers increasingly demanding in terms of costs reduction and the real efficiency of new therapies

Risk assessment



Agencies in charge of health care provision (particularly the reimbursement of drug prices) face the approvals of high-cost treatments, while having to manage deficits arising from demographic changes.

Western Europe spending on prescription-only drugs is constantly growing. However some governments, such as France are able to manage the deficit’s level.

In the USA, drug prices are on a regular upwards trajectory, in particular those linked with specialty medicine. Local Pharma groups saw their profits rise by 43% according to the Census Bureau. The authorities made numerous proposals to curb this inflationary spiral by tying Medicare drugs prices to international average. The introduction of the Affordable Care Act (ACA or Obamacare) has led to increased healthcare spending, with the number of uninsured adults constantly falling.

The process of rebalancing the Chinese economy, prioritizing domestic consumption, places an increased focus on meeting households' health needs. The extension of the coverage for healthcare costs (still partial, but including some new cancer therapies) means the authorities need to keep a lid on costs, by promoting the use of generics.


The overall ageing population worldwide and lifestyle diseases are propping up the use of medicines in each of the six regions monitored by Coface. This situation has led authorities to pay greater attention to health spending and, in some cases, to rein in costs.

In 2019, the price control measures in force in Western Europe will still apply, despite growing demand. For instance, in France, the measures included in the Social Security Financing Act, implemented to limit spending growth (+2.5% for 2019), will likely continue to affect pharmaceutical companies via price cuts, and favour the emphasis on generics’ use. Market access of expensive specialty drugs for smaller populations means regulators need to continue to make difficult decisions on reimbursement levels and access conditions. The English National Institute for Health and Care Excellence (NICE) rejected the reimbursement of Gilead Sciences’ Yescarta due to its high cost.

The cost of healthcare for an American family of four will still increase in 2019 by 4%, reaching USD 29,300; according to Coface calculations based on data from the Milliman consulting firm due to higher prescription drug costs and hospital services. Close to 42% of this amount is covered by the household, with only 58% by the “sponsor” (whether a private company, the federal state, or a local authority). The sales’ approval of a number of specialty drugs over many years has driven this cost up: according to Milliman, the cost of medicine increased by 6% in 2018. While this rise was slower than the preceding two years, it is still high, notably for middle class. Moreover, there are disparities in insurance premia across states, as well as between urban and rural areas, due to varying levels of competition. This is notably the case for those insured under the ACA law, with rural inhabitants of Wyoming having to pays USD 700 a month per capita, while New Jersey premia are set to USD 290, according to data from the US Department of Health.

In China, since mid-2015, drug prices are no longer determined by public authorities, leaving it up to "market forces" to set the price levels. Nevertheless, these apparent free market rules mask a public determination (enshrined in law) to force providers to offer reasonable prices via negotiations. Similarly to last year, 2019 medicine prices are expected to continue on the same trends. The outcome of October 2018 negotiations between drug manufacturers and health authorities will come into force in 2019. This agreement plans to cut prices of expensive drugs up to 57%. Authorities in provinces are exerting pressure on pharmaceutical companies to reduce prices when bidding for drug procurement, making medicine affordable for hospitals.


Research & Development spending in the sector increased around the world in 2018 by 4.2% and are likely to increase in 2019 (3.1%), according to Evaluate Pharma, who also expect drug sales to increase by 4.9% in 2019. This increase, which applies to all major world economies, will be a reflection of the expanding oncology market and orphan drugs for treating rare medical conditions.

In 2019, Coface estimates that spending on prescription drugs is set to grow by 2% for the top five Western EU countries, to reach almost €129 billion comparing to 126, last year. While the ever-increasing specialty drug prices will theoretically push health spending higher, reluctance from payers is likely to lower reimbursement prices. Moreover, with a lower expected growth in the region, health budgets will tighten, thus impacting sales prospects.

In the United States, the Federal Drug Agency (FDA) is thought to have approved almost 47 new molecular entities (NME) at end-October 2018, compared to 36 in 2017. The majority of these NME belong to the fields of oncology and orphan diseases, as well as treatment of cardiovascular diseases. Coface estimates that sales of medication will total USD 493 billion in 2019, i.e. a 5% rise compared with 2018 (USD 474 billion). The measures being implemented by health insurers, pharmacy benefit managers or the Federal State in the healthcare system, which aim to limiting the costs linked with the marketing of increasingly expensive drugs, should start to bear fruit. In addition, the launch in the market of biosimilars (the “generics” of biological drugs) should also contribute to somewhat slowing the increase in drug expenditure. The new Democrat-led House is likely to protect the future of the ACA from President Donald Trump’s efforts to disband it.

Chinese spending on drugs stood at around USD 142 billion in 2018, according to Fitch. Coface estimates that sales should grow by 4% in 2019 to reach USD 148 billion. There are however two major risks to note: the lack of transparency during public tenders, and measures to control health spending in China. The health authorities would in fact like to limit prices of imported drugs (generally the most innovative ones), especially in oncology. Although 96% of the population has health coverage, this regime does not fully cover the most expensive treatments, as it depends on regional disparities and coverage scheme. In addition, public authorities have heightened their vigilance about the practices of foreign pharmaceutical companies.


Last update : February 2019

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