U.S. healthcare spending is expected to grow by 4% to $3.6 trillion this year while drug spending is expected to increase 2.5% to $370.7 billion, according to a new report from Fitch Solutions Macro Research, a unit of Fitch Group.
In all, Fitch Solutions forecasts healthcare spending to increase to $4.3 trillion a year by 2023. Overall pharmaceutical sales, estimated to make up about 10% of healthcare spending in 2019, are expected to make up about 9.7% of healthcare spending by 2023.
Among the biggest takeaways, authors of the report say, is that Medicare is "on course to becoming the leading payer for prescription drugs in the U.S.," and Medicaid is becoming a more prominent player. Meanwhile, private health plans are not expected to contribute significantly to growth in prescription drug spending.
Out-of-pocket spending on drugs by patients is expected to increase.
The report points out recent moves by the Trump administration could impact the forecasts for both the healthcare and pharmaceutical industries, including a growing focus on drug prices, support for increased competition such as through the introduction of biologics and the role of pharmacy benefit managers.
The authors write that President Donald Trump's comments indicating intentions to wait until after the 2020 presidential election to put Congress to vote on a new healthcare plan make it likely healthcare will be a hot topic during the next campaign.
Fitch Solutions also warned the political environment could impact the broader economy and, by extension, the healthcare and pharmaceutical sectors.
"Broad legislative gridlock is likely to persist through 2020 given a split Congress," the authors wrote. "The potential for brinksmanship from both parties, particularly with a negotiation on the debt ceiling on the horizon, could undermine consumer or business confidence."