US Net Drug Spending Surges: Insights from IQVIA’s 2024 Report
As sure as the sun rises, prescription medicine use and total drug spending continue to increase in the U.S. A recent report from IQVIA Institute provides an in-depth look at the trends shaping the pharmaceutical landscape, particularly around their significant findings from 2024.
Rising Prescription Usage and Spending
According to IQVIA’s Understanding the Use of Medicines in the U.S. 2025 report, total U.S. prescription medicine use rose by 1.7% last year, translating to a remarkable 215 billion days of therapy on daily doses. Alongside this uptick in usage, the U.S. market saw a net spending increase of **11.4%**, a notable jump from the **4.9%** recorded in 2023. This spike represents a $50 billion increase, bringing net spending to **$487 billion** in aggregate. According to IQVIA, the year 2025 marked a period of “historic growth,” only overshadowed by the COVID-19 vaccine surge in 2021.
Key Growth Drivers
A major driver of this growth was observed within the categories of obesity and oncology medications. Specifically, medications classified as **GLP-1 agonists**, intended for diabetes and obesity treatment, accounted for **29% of the spending growth in 2024**. The report also highlighted that three out of the 31 key high-growth products were newly launched medications from 2023 or 2024. These included:
- Roche’s age-related macular degeneration treatment Vabysmo
- Sanofi and AstraZeneca’s respiratory syncytial virus (RSV) antibody Beyfortus
- Novartis’ multiple sclerosis therapy Kesimpta
Furthermore, IQVIA identified AbbVie’s Skyrizi as the leading contributor to immunology spending growth, particularly within its psoriasis indication.
Pillars of Future Growth: Oncology and Obesity
Over the next five years, the outlook remains optimistic, with IQVIA projecting a widening gap between list price spending and manufacturer net revenues. List price spending is expected to grow annually between **5% to 8%**, while net revenues of manufacturers are forecasted to experience **3% to 6%** average annual growth. By 2029, total net spending is anticipated to exceed **$600 billion**.
The oncology sector is poised to lead this growth with over **100 new drug launches and label expansions anticipated** through 2029. This surge may contribute an estimated **$165 billion** to oncology spending, underlining the sector’s potential. The situation for obesity drugs, however, is fraught with uncertainty; while optimistic scenarios estimate net spending reaching **$60 billion in 2029**, various potential reimbursement challenges could influence this outcome.
Impact of Patent Expirations and Biosimilars
A critical factor affecting the market landscape is the “patent cliff”—several prominent drugs like AbbVie’s **Humira** have recently lost exclusivity, leading to a drop in sales totaling **$77.5 billion**. This decline has primarily been driven by the arrival of bio-similars rather than traditional generics. Going forward, drugs like Amgen’s bone medications, **Prolia** and **Xgeva**, as well as Johnson & Johnson’s immunology powerhouse **Stelara**, are expected to face similar pressures in the upcoming year. Near the decade’s end, we can expect further exclusivities to be challenged with oncology staples such as **Merck’s Keytruda** and **Bristol Myers Squibb’s Opdivo** also coming under biosimilar competition.
Conclusion: A Forward-Looking Perspective
The surge in net drug spending to **$487 billion** coupled with the projected future growth underscores the evolving landscape of the pharmaceutical industry. Strategic investment in high-potential sectors like oncology and obesity could yield significant returns as the market adapts to ongoing changes, including the entrance of novel competitors and the loss of exclusivity for leading therapeutics. Investors should closely monitor these trends and consider their implications while positioning within this dynamic environment.
In summary, the IQVIA report paints a comprehensive picture of thriving segments and cautionary notes that all stakeholders in the pharmaceutical industry must navigate.
