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Chapter 3 Healthcare and The Life Sciences - Major Business and Technology Trends Shaping The Contemporary World
Chapter 3 Healthcare and The Life Sciences - Major Business and Technology Trends Shaping The Contemporary World
Over the course of the past 50 years, life expectancy at birth has been
growing progressively across the world, from an average of 46.5 years in
1955 to 65.2 years in 2002 [1]. While there are significant disparities be-
tween developed and developing economies, the risk of death between
ages 15 years and 60 years has dropped from 35.4 percent in 1955 to 20.7
percent in 2002 across the world [1]. In the next four decades, developed
economies will have the oldest population structures, but the fastest ag-
ing populations and massive majority of older people will reside in less
developed economies. The aging population trend has existed in devel-
oped economies for many decades, but is growing fast in developing
economies. The increasing levels of life expectancy combined with the
swelling aging populations involve significant implications for health, in-
cluding increased rates of non-communicable diseases, shortages of
healthcare workers or resources, and growing numbers of people need-
ing long-term care. As a direct consequence of aging populations, the inci-
dence of chronic or non-communicable diseases is on the constant rise. In
2010, chronic diseases accounted for 86 percent of all U.S. health expendi-
ture. Other parts of the world and even developing economies are on the
same path and will be affected by the financial burden of chronic or non--
communicable diseases [2]. In addition to aging populations, unhealthy
diets and sedentary lifestyles have become pervasive in recent years and
are causing non-communicable diseases or disorders such as diabetes,
atherosclerosis, and obesity. For example, across the world, 382 million
people are categorized as diabetic and 600 million as obese [3].
Virtual care will extend access to healthcare in remote areas and will cre-
ate a new structure for the healthcare system. As a result, there will be
less focus on building new beds and more on developing digital services
to provide improved access at lower cost. The digitization will lead to an
emphasis on consumer-centric healthcare, thus enabling citizens to as-
sume more responsibility for managing their healthcare. In this new
model, the consumers will play an important role in using digital tools to
improve productivity by reducing the need for professionals. Moreover,
the use of precision medicine, robotics, and medical printing will improve
patients’ healthcare services at a lower cost. Digitization will move
healthcare closer to the home, through advances in the connected home
and virtual care, and will empower consumers to assume more responsi-
bility in managing their healthcare. In addition, digitization will lead the
healthcare enterprises to provide data-driven solutions and make deci-
sions more effectively. Therefore, digitization is expected to create a ma-
jor shift toward a value-based healthcare where the gap between the digi-
tal and physical worlds is bridged [15].
Medications are already very expensive in the United States, but their
prices are likely to surge even higher in the coming years. Based on a
study conducted between January 2006 and December 2015, retail prices
for 113 chronic-use brand-name drugs increased cumulatively over 10
years by an average of 188.7 percent [27]. The high cost of prescription
drugs puts a heavy financial burden on healthcare systems, insurers, pa-
tients, employers, and providers. In 2015, the average senior American
taking 4.5 prescription drugs per month had to pay more than 26,000 U.S.
dollars per year for the cost of therapy [27]. Among the industrialized
countries, the United States has the highest spending on prescription
drugs [28]. The prescription drug expenditure constitutes nearly 20 per-
cent of the healthcare costs, showing a growth of 13.1 percent in 2014
[29]. In recent years, specialty drugs are rapidly gaining acceptance and
popularity in the United States. Specialty drugs are difficult to administer
and often come in injectable formulations. Originally, specialty drugs
were used exclusively to treat chronic diseases such as cancer, rheuma-
toid arthritis, and multiple sclerosis, but in the last few years, their appli-
cation has expanded to touch additional diseases [31]. Specialty drugs are
generally expensive and accounted for 36 percent of the total drug spend-
ing in the United States in 2015, or approximately 155 billion U.S. dollars
of the 428 billion U.S. dollars spent annually on medicines. Spending for
specialty drugs has grown by 23 percent between 2014 and 2015, com-
pared to growth of 7.8 percent for traditional medicines. Along with this
trend, specialty pharmacies are expanding rapidly. Specialty pharmacies
are intended to manage the necessary handling, storage, and distribution
of complex therapy drugs [30].
Some drug makers have seen their reputation tarnished by scandals and
reports on predatory pricing and unethical practices. For example, Pfizer
Inc. has raised prices on 133 of its drugs in the United States in 2016 by 10
percent or more. Sovaldi, a drug to treat Hepatitis C virus, costs 1,000 U.S.
dollars per day for the 12-week course of treatment. Orkambi, a drug
therapy intended to treat cystic fibrosis, costs 259,000 U.S. dollars per
year [32]. Due to these hefty prices, many countries are introducing price
controls by putting pressure on pharmaceutical companies. In the United
States, health plans control medication pricing, while in the United
Kingdom and Germany, more regulations have been adopted to control
drugs prices [33]. In tandem with tighter controls on prices, the effective-
ness of drugs is evaluated in many countries like the United Kingdom and
China. In China, the government is bringing the medications under a cen-
tral supervision. In developing economies such as India, pricing authori-
ties are controlling medication prices for a wide range of drugs, including
painkillers and antibiotics, and drugs for cancer and skin disease treat-
ments. Due to an increasing demand and rising prices, generic drugs will
continue to gain market share as consumers seek to reduce costs. While
in the United States, generic medications account for 70 percent of the
prescription drugs by volume, in China, they account for two-thirds of
prescriptions.
In the next decade, people in every world region will suffer more death
and disability from such non-communicable diseases than from infec-
tious and parasitic diseases. In 2008, non-communicable diseases ac-
counted for 86 percent of the diseases in high-income countries, 65 per-
cent in middle-income countries, and 37 percent in low-income countries.
By 2030, the shares of non-communicable diseases in middle- and low-in-
come countries will increase, respectively, to 75 and 50 percent.
According to the WHO, non-communicable diseases are responsible for
the death of 40 million people each year, representing 70 percent of all
deaths. Cardiovascular diseases with 17.7 million deaths per year account
for most deaths followed by cancers (8.8 million), respiratory diseases (3.9
million), and diabetes (1.6 million).
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