Let’s quantify how this change will occur.
We project that the pharmacy industry’s revenues will exceed $483 billion in 2020. Almost all of the growth will come from specialty drugs. Meanwhile, pharmacy revenues from traditional drugs will be almost flat, despite higher demand.
You’ll find our forecasts for pharmacy revenues from traditional and specialty drugs below. Be sure to check back in five years and see how close we came!
We estimate that total revenues of retail, mail, and specialty pharmacies reached $364.1 billion in 2015, up 12.1% from 2014. This marks the second year of double-digit growth. We further estimate that specialty drugs accounted for 27% of the pharmacy industry’s revenues in 2015.
According to our projections, the pharmacy industry’s revenues will exceed $483 billion in 2020. Specialty drugs will account for almost half of industry revenues. Note that our forecasts include only specialty drugs paid under the pharmacy benefit. The following chart appears in Section 4.3.1. of our 2016 Economic Report on Retail, Mail, and Specialty Pharmacies.
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Four key factors drive this projection:
- The End of the Generic Wave
- New Specialty Drugs
- Growth in Prescription Utilization
- An Aging population
And even if our projections don’t pan out, I take comfort in the words of management theorist Laurence Peter: "An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."