Covid vaccine will drive healthcare spending in tumultuous 2021

  • After declining in 2020, global healthcare spending will rise by 6% in 2021, driven in part by Covid-19 care, especially vaccine procurement.
  • However, public and private healthcare budgets will be tight and pricing pressures may force restructuring among healthcare funds, providers and suppliers.
  • Asia will have among the fastest growth in health spending as countries, including China, make yet more progress towards universal healthcare.

Our new report “Industries in 2021” has estimated that health spending will accelerate in 2021 after declining in 2020 amid a slump in non-Covid care. Even so, the report predicts a tumultuous year for the healthcare and pharmaceuticals sectors, with social distancing measures and the economic downturn threatening both funding and healthcare provision.

Still, 2021 will see progress towards universal healthcare. The Chinese government plans to expand outpatient care reimbursement in the first reforms to employee insurance since 1998. Mexico will complete rollout of a new public health insurance system, Insabi, by the end of 2021. In the US, a new administration is likely to come under pressure to ensure that people have health insurance when job cuts force them out of employment-based plans.

“The healthcare and pharmaceutical industries have never come under so much global scrutiny as they have during the coronavirus pandemic, when their ability to provide care, equipment and medicines has been in doubt. That scrutiny will not disappear in 2021. The world is waiting impatiently for the arrival of a coronavirus vaccine; it is also more conscious than ever of gaps in care, whether at old peoples’ homes, at rural clinics, or in cancer wards.”

Ana Nicholls, Director of Industry Operations at The Economist Intelligence Unit

The pharmaceutical sector will continue to be under pressure to develop a coronavirus (Covid-19) vaccine, but this will be an unprecedented challenge. Some of the leading candidates are new types of vaccines with no track record of approval, while the more traditional vaccines being developed by China and Russia may be difficult to produce at scale effectively. Even once a vaccine is ready, distributing it will require the mobilisation of huge resources, from airlines to syringe producers to rural health workers.

health spending growth in 2021

Download the full report “Industries in 2021.”