Global health care expenditures are expected to continue to rise as spending is projected to increase at an annual rate of 5.4 percent between 2017-2022, from USD $7.724 trillion to USD $10.059 trillion.
As economies grow, and health care provision and insurance mechanisms expand, demand for local and imported pharmaceutical products is on the rise. Research from consulting firm McKinsey & Company highlights that emerging markets have been outspending Germany, France, Italy, the UK and Spain (the EU5) on pharmaceuticals for several years, with total market size of $281bn compared with the EU5’s $196bn in 2014.
Estimates from the research also indicate that between 2015 and 2020, emerging market spending is expected to account for $190bn in sales growth. On the African continent alone, the pharmaceutical industry expanded in value from $4.7bn in 2003 to $20.8bn in 2013, with projections that the need for medicines and medical equipment will rise by between 6% and 11% by 2020. The strategy & survey highlighted that between 2015 and 2020, fast-growing markets like Turkey and Mexico were expected to see a 9.3% increase in sales.
Not only is demand on the rise, but the diversity of pharmaceutical needs is growing as emerging markets increasingly deal with non-communicable diseases already prevalent in wealthier economies, including diabetes and hypertension, while communicable diseases that afflict many emerging markets – such as AIDS, malaria, and tuberculosis – persist.
The incidence of diabetes, in particular, is expected to accelerate in many emerging markets and drive demand for pharmaceutical products. According to the World Health Organisation (WHO), the global prevalence of diabetes has nearly doubled since 1980 from 4.7% to 8.5%, growing most rapidly in low- and middle-income countries.
The world has experienced the growth of technology towards digitalization from the old analog culture. This shift of technology has great potential in the coming future also which is ultimately encouraging investors to take part in this growing field.