The US prescription drug market will be worth around $550 billion in five years, up from $395 billion in 2014, reported research and consulting group GlobalData.

Joshua Owide, who leads the research group’s healthcare industry dynamics division, told MM&M that the jump in the number of insured patients due to healthcare reform will likely prompt more patients to seek out a diagnosis and therefore result in more prescriptions.

But there is more to it than just more patients and more prescriptions. The firm’s projection dovetails with what industry watchers have seen elsewhere, which is that the anticipated uptick in prescriptions will reflect the investments Big Pharma and smaller biotechs have been making to create drugs that go beyond new-and-improved versions of old drugs to creating therapies that are new and novel.

After the patent cliff this may seem like a new trend, but it is just part of business.

“Every few years you have a wave of new drugs,” Owide said. This includes the cascade of new oncology drugs and innovation in the diabetes space.

Cancer, which is among GlobalData’s list of growing disease states, is an area with a high level of need and high morbidity. Owide said cancer medications will probably account for a third of drug approvals over the next four years.

Pricing for this category is poised to be tough. Pharmacy benefit manager Express Scripts noted in its 2014 Drug Trend Report that cancer medication costs rose 20.7% last year because of higher prices and greater use. Express Scripts also noted in the report that the costs are not linked to a single therapy but are associated with the use of multiple medications all at once or in a set sequence. This is in addition to treatment regimens the PBM said mimic that of a chronic condition as opposed to an isolated illness, which can mean “longer and sometimes more complex treatment.”

Sanford C. Bernstein analyst Tim Anderson said in a March 16 research note that PBMs may not be able to rein in the cost of cancer treatments as much as they may hope with aggressive rebates or discounts, particularly when it comes to PD-1 inhibitors (like Merck’s Keytruda) or other immuno-oncology drugs. Even incentives like cost-sharing, which are meant to pinch patients into thinking about the cost of treatment, have limits. In this case, Anderson wrote that many health plans limit a patient’s out-of-pocket expenses to about $3,000, providing the patients with some sort of pricing insulation. He also wrote that many of these drugs are physician-administered, which means the cost is routed through a health plan’s medical benefit, as opposed to self-administered drugs, which are generally paid for through a pharmacy benefit. This allocation also influences pricing.

Diabetes is another space GlobalData said could be headed for growth. Like the expected growth of cancer drugs, growth in the diabetes sector is a matter of greater patient reach as well as the added value that newer medications may bring to the current array of treatments. Diabetes has been a high-cost category for some time. Express Scripts said that diabetes medications were the most expensive traditional therapy class based on per-member per-year costs last year for the fourth year running. The PBM’s three-year outlook includes the expectation that diabetes costs will continue to rise each and every year.

Express Scripts attributed 2014’s costs to a mix of brand innovation and what it described as “brand inflation,” noting, for example, that drug costs have gone up for Sanofi’s Lantus and Novo Nordisk’s Levemir. The data shows brand resilience in the category and noted that generics accounted for less than half of last year’s diabetes prescriptions, even though three of the most common diabetes treatments have generic competition.

The diabetes space is particularly crowded for drugmakers because patients and payers have many options, and Anderson noted in January that the makers of diabetes medications are fighting to differentiate themselves from the competition. This is not news for companies like Eli Lilly, which noted in February that it is working to carve out space in the category for its newer drugs, like Trulicity. Sanofi, which markets the blockbuster diabetes medication Lantus that went off-patent last month, is looking for its just-approved Toujeo to take the place of Lantus, but the drug is competing directly with Lantus.

Owide noted that although the projected $550-billion market does represent optimism, the market realities require a bit of caution. Approvals and expanding patient populations do not always translate into long-term value. “You have to be conscious of the fact that there are still risks,” he said.