Tuesday, November 15th was declared “Day of 8 Billion” by The United Nations; the day the world’s population hit 8 billion people. The milestone comes just 11 years after the global population hit seven billion people.

While growth is expected to slow slightly over the coming decades, the human population is still projected to reach 8.5 billion by 2030, 9.7 billion by 2050, and peak at close to 10.5 billion during the 2080s. It will hover near that level until 2100.

The changes in population will be felt differently across the globe, with more than half of the projected increase up to 2050 to be concentrated in eight countries: the Democratic Republic of Congo (DRC), Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines, and Tanzania.

Over the same time frame, 61 countries will face population losses of at least one percent. The countries expected to face the biggest population declines (emigration, falling fertility rates, etc.) of more than 20%, include: Bulgaria, Latvia, Lithuania, Serbia, and Ukraine.

In addition to a rapidly growing global population, life expectancy is also expected to rise, from almost 73 in 2019 to just over 77 in 2050. By 2050, the proportion of those aged 65 years of age and older will jump from 10% in 2022 to 16% in 2050. To put that number into perspective, the number of people 65 and over will roughly double that of children under the age of five and around the same as those under 12.

These demographic changes will present major challenges to developed and developing nations.

Will Global Healthcare Spending Need to Increase?

Despite declines in gross domestic product (GDP) during the pandemic, healthcare spending remained stable in 2020 and 2021. Healthcare spending is defined as all public (funded by taxation or mandatory health insurance) plus all private (voluntary health insurance, out of pocket spending, and private other) spending.

While global healthcare spending was relatively flat in 2020 at USD $8.3 trillion, it grew 5.8% in 2021 to USD $8.8 trillion. That upward trajectory is expected to continue. By 2030, health expenditures will outpace GDP growth in almost every OECD (Organisation for Economic Co-operation and Development) country.

Some of the 38 countries in the OECD include Australia, Canada, Colombia, Denmark, France, Germany, Italy, Japan, Poland, Turkey, the United Kingdom, and the United States.

Healthcare spending per capita will grow at an average annual rate of 2.7% across the OECD from 8.8% in 2018 to 10.2% of GDP by 2030.

What Are Some of the Biggest Global Health Concerns?

On one hand, a global population of eight billion is a testament to the great progress we’ve made in medicine and health systems. On the other, a growing and aging population comes with its own unique health challenges.

Some of the biggest health risks will be diabetes, obesity, and hypertension (high blood pressure).

  • Between 2021 and 2045, the global expenditure for diabetes is expected to grow from USD $966 billion to just over USD $1 trillion. Other studies suggest the global cost of diabetes will soar to USD $2.5 trillion by 2030.
  • The global costs of treating obesity-related illnesses will be US $1.2 trillion each year starting in 2025. By 2025, there will be an estimated 2.7 billion overweight and obese people in the world—roughly a third of Earth’s population.
  • High blood pressureis the leading risk factor for death globally. In the U.S., nearly 1 out of 2 adults (around 108 million) have high blood pressure. That high blood pressure costs the U.S. about $131 to $198 billion each year. In Canada, eight million people, or one in four adults, are affected by hypertension.

As we’re learning, though, many diseases and illnesses are interconnected. The rise of obesity is one of the root causes in the rise of hypertension and diabetes. Hypertension is also a leading cause of stroke and heart disease.

There is also a growing body of evidence that links obesity and 11 different cancers: colon, rectal, pancreatic, ovary, kidney, endometrium, post-menopausal breast, biliary tract, multiple myeloma, esophageal, and bone marrow.

Other more common diseases today are expected to be less prominent in the future. Studies show that millennials are less likely to be smokers, making diseases related to smoking less common.

What Are Some of the Biggest New Drugs on the Market?

To combat some of the biggest global health concerns, researchers and drug companies have been hard at work. In addition, Health Canada, the U.S. Food and Drug Administration (FDA), and other global health agencies are always approving the launch of new drugs. In just 2021 alone, the FDA approved 55 new drugs and the agency has approved even more in 2022.

Some of the most anticipated drugs in 2022 treat everything from Alzheimer’s to diabetes, psoriasis, and lung cancer.

  • Camzyos: Camzyos (mavacamten) was the centerpiece of Bristol Myers Squibb’s $13.1 billion acquisitionof MyoKardia in 2020. The FDA approved Camzyos capsules to treat adults with hypertrophic cardiomyopathy, a rare disease that occurs when the heart muscle thickens and obstructs blood flow.
  • Mounjaro: Eli Lily’s Mounjaro (tirzepatide) injection received FDA approval in May, the first and only GIP (glucose-dependent insulinotropic polypeptide) and GLP-1 (glucagon-like peptide-1) receptor agonist for the treatment of adults with type 2 diabetes. Estimated sales for 2026 are pegged at $4.9 billion. As an added plus, while Mounjaro is not indicated for weight loss, it does lead to significant weight reduction.
  • Sotyku: Bristol Myers Squibb’s Sotyktu (deucravacitinib), an oral treatment for adults with moderate-to-severe plaque psoriasis, received FDA approval in May. Sales from Sotyktu are projected to generate $2.4 billion in sales by 2026.
  • Hemgenix: On November 23, the FDA approved Hemgenix, a new drug to treat adults with hemophilia B, a genetic bleeding disorder that affects roughly 1 in 40,000 people. Manufactured by CSL Behring, the price for the gene therapy treatment is $3.5 million, making it the most expensive drug in the world.
  • Lecanemab: One exciting drug that is expected to be approved by the FDA in 2023 is Lecanemab, the first drug shown to improve the symptoms of Alzheimer’s by slowing the disease. Eisai, a Japanese pharmaceutical firm, and Biogen a U.S. biotech, the makers of Lecanemab, have filed for “accelerated approval with the FDA”, which means it could be licensed as early as January 2023.

Healthcare spending has remained remarkably stable at a time when global macroeconomic headwinds are negatively impacting other sectors of the economy. The pandemic was responsible for unleashing broad public, government, and corporate support for healthcare investments.

And private equity and venture capitalists are continuing to increase their investments in healthcare. In fact, in 2021, they invested more than twice what they did in 2014. Again, this enthusiasm can be traced to the pandemic, which showed exactly what the pharmaceutical industry is capable of in a very short period of time.

It also points to an exciting future. Regardless of where we are in the economic cycle, or whether the world comes to a standstill because of a pandemic, people need healthcare, no matter what. That, coupled with an aging population and a life expectancy that has more than doubled over the last century, means overall healthcare spending will remain robust with pharmaceutical companies and drug manufacturers aggressively seeking out the next breakthrough drug.

Investing in Healthcare with LIFE ETF

The Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip healthcare companies with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. The LIFE ETF is available in hedged, unhedged and USD classes.

Managed by an established team of industry veterans with a proven track record of success, Evolve ETFs creates investment products that make a difference. For more information, please visit www.evolveetfs.com or download our one-pager about LIFE ETF.

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