In 2022 global healthcare will continue to feel the effects of the pandemic and although COVID-19 has become less virulent, with the global death rate down to 0.4 percent from an initial peak of about three percent, new variants are still set to emerge this year.
At the Economist Intelligence Unit (EIU) webinar on March 31, EIU’s Director of Industry Operations Ana Nicolls spoke with Lead Healthcare Industry Analyst Aakash Babu and Healthcare Analyst Namita Karnik to identify 2022’s key healthcare and pharma trends, many of which relate to COVID-19.
Global healthcare spending to rise driven by backlog of non-COVID care
In 2022, as countries open up and governments try to fill the gaps by setting up dedicated funds for healthcare, global healthcare spending is expected to rise by 5.3 percent.
Globally, the pandemic has increased awareness of healthcare’s importance and, as governments continue to struggle to meet that need, in 2022 public spending will increase. Specifically, China and other countries with public health insurance systems will continue to boost their reach while in the Middle East, the rise in oil prices may help UAE and Saudi Arabia to meet some of their public healthcare ambitions.
Much of this spending will be centred on two factors, as Karnik noted, “there’s still a strong demand for COVID care and vaccines plus the need to catch up with the backlog of non-COVID care”
The UK, for example, has allocated USD 1.3 billion to treat the 300,000 people who have been waiting for over a year for surgeries, medical procedures, and diagnostics, because of elective care delays during the pandemic.
Private expenditure is also due to recover with more patients globally opting for private health insurance.
Pharmaceutical sales to increase with a strong demand for COVID vaccines
Pharmaceutical sales are expected to rise by 4.9 percent in 2022 with the US continuing to lead the world in pharmaceutical sales numbers.
“This rise will be driven partly by COVID-19 vaccine sales and the development of other anti-COVID treatments … and it will also be boosted by the recovery and demands for non-COVID care and elective surgeries that were postponed during the pandemic,” said Babu.
Changes in legislation that are expected to come into effect by the end of the year in the EU, for example, could also change the pharmaceutical landscape and boost sales.
In China, legislation changes are making it easier to import and register medicines, including innovative drugs.
Additionally, more variants will mean more vaccine booster shots and, as people go back to working in offices, many countries that previously used less effective vaccines are now switching to more expensive mRNA vaccines.
UNICEF forecasts that between 16.8 billion and 20.9 billion doses of COVID-19 vaccines will be produced this year. Demand for the Pfizer/BioNTech and Moderna mRNA vaccines is very strong, and Pfizer is expecting sales in excess of USD 30 billion this year.
Given that 35 percent of the world’s population has not received even one dose of a vaccine, let alone a second shot or a booster, strong demand is inevitable. Certain African countries, for example, have not vaccinated even ten percent of their populations. The worldwide initiative aimed at equitable access to COVID-19 vaccines, COVAX, is still trying to get vaccines to poorer countries, having delivered 1.4 billion doses to these countries so far.
Innovation to drive pharmaceutical sales growth
Despite the challenges of the pandemic and the global recession, pharmaceutical companies maintained overall investments in R&D. Some spending was diverted to COVID, but the sector also benefitted from developing new approaches to data, trials, diagnostics and collaboration.
The fact that it took under a year to roll out a COVID vaccine has raised questions about how innovation could be approved in the sector and if authorities and drug makers could streamline the approvals process for new drugs.
Both the US and the UK are planning to review their clinical trial regulations to involve the use of digital health technology and remote data collection, which could also help to accelerate drug approvals.
In addition, there is huge potential for the application of mRNA technology, used for certain COVID vaccines. The technology is now being tested for cancer and HIV diseases.
Cancer dominates research pipelines but there is still a need for breakthroughs on dementia and other age-related conditions as the global population ages.
Pharmaceutical prices to rise
Although even the USA is now undergoing high-profile debates about drug pricing, pharmaceutical prices are expected to accelerate over the next few years, with supply chain issues and energy prices driving up production costs in the short term. Sourcing Active Pharmaceutical Ingredients (APIs) from Asia will continue to be a bottleneck with pharma companies forced to pass these expenses onto their customers.
Efforts by companies like Sanofi to re-shore their supply chains closer to key markets may help but may also create extra costs.
The adoption of generics is also expected to slow as the patent cliff becomes less acute. Additionally, greater adoption of specialised and expensive personalised therapies will also raise prices.
Russia-Ukraine war to weaken healthcare systems
There are of course the effects of the war on the Ukrainian healthcare system itself, with a lack of medical supplies and the impact on the hospital infrastructure—18 hospitals have been bombed so far. However, the war will also put a strain on countries receiving refugees from the Ukraine and disrupt pharmaceutical supplies in the entire region.
Even though pharma is exempt from global sanctions, there is still a risk of rising prices and supply chain issues. Ukraine, as the second-largest importer of pharmaceuticals from Russia, will be cut off from that supply. Russia will also suffer from supply problems, seeing as the country imports, according to data from 2020, over USD two billion’s worth of pharmaceuticals from Germany and over USD one billion from the United States.