Healthcare legislation in the United States is one of the key drivers of the country's pharmaceutical market, which is forecast to expand at a compound annual growth rate (CAGR) of 5.6 percent over the next few years.
Research and consulting firm GlobalData said on Tuesday that it expects the U.S. pharmaceutical market to be worth $548.4 billion by 2020, up from approximately $395.2 billion in 2014.
A new report from GlobalData sets out several factors that will drive this growth, including:
- an aging population
- increasing healthcare expenditure
- the rising prevalence of chronic lifestyle diseases such as diabetes and obesity
- universal and easy access to reimbursement for pharmaceutical product costs
- the 2010 Patient Protection and Affordable Care Act (PPACA)
Joshua Owide, GlobalData's director of Healthcare Industry Dynamics, said that U.S. citizens and the country's pharmaceutical industry have benefited significantly from the PPACA and its amendment, the Health Care and Education Reconciliation Act.
He explained: "As the PPACA mandates health insurance coverage for all Americans, the U.S. 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.
"Around 20 provisions of the healthcare legislation are expected to have a direct or indirect impact on the volume of drug and biologic sales. As many as 32 million formerly uninsured citizens could enter the patient pool, resulting in new business worth $115 billion over a period of 10 years."
Additionally, GlobalData said that the U.S. Food and Drug Administration (FDA) oversees a transparent, well-structured and competent regulatory system that facilitates the approval of pharmaceutical products and boosts market growth.