As the U.S. economy continues to expand, the health industry is forecasted to grow at a pace that exceeds the growth of the gross domestic product (GDP). During the projection period from 2023 to 2032, national health expenditures are expected to average a growth rate of 5.6%, significantly outpacing the nominal GDP growth rate of 4.3%.

Record-Breaking Health Expenditures

In 2023, the estimated amount spent on hospital care, clinical services, pharmaceuticals (including vaccines), and other health services reached an unprecedented $4.1 trillion. According to the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), this figure is projected to soar to $7.7 trillion by 2032. This data, published in Health Affairs on June 12, 2024, underscores a trend where healthcare spending growth will outpace GDP growth over the next decade. Consequently, the health sector's share of GDP is anticipated to increase from 17.3% in 2022 to 19.7% by 2032.

Trends in Prescription Drug Spending

Within the health industry, the growth rate of prescription drug spending is projected to show a slight deceleration in the near term. In 2024, the growth rate is expected to slow to 6.8%, followed by a further deceleration to 4.6% in 2025. However, this trend will reverse in 2026, with the growth rate expected to accelerate to 6.5%, a pattern influenced by actions taken by Medicare.

Vaccine Market Growth

The U.S. Centers for Disease Control and Prevention (CDC) reports that nearly 3.5 billion vaccine doses have been distributed in the United States over the past decade. The vaccine market, valued at $102.9 billion in 2023, is projected to expand by 47% to reach $151.3 billion by 2030. This growth is driven by the development and distribution of innovative vaccines targeting diseases such as chikungunya, dengue, polio, and tuberculosis.

A recent report published in 2023 highlights the extensive pipeline of vaccines and treatments, with 1,600 therapies in clinical development specifically for cancer. Additionally, the global travel vaccines market, which experienced a downturn during the recent pandemic, is expected to rebound and grow at a compound annual growth rate (CAGR) of 9.9% through 2028.

Implications for the U.S. Health Industry

The anticipated growth in healthcare spending reflects the increasing demand for medical services and innovations in treatment and prevention. With healthcare expenditures projected to reach new heights, stakeholders across the health sector must adapt to manage the associated costs while ensuring access to high-quality care.

The rising investment in healthcare, particularly in pharmaceuticals and vaccines, is indicative of the sector's pivotal role in addressing public health challenges and advancing medical research. As the U.S. health industry continues to evolve, its expansion presents both opportunities and challenges in balancing economic growth with the imperative of maintaining a robust and resilient healthcare system.