A growing disease burden, universal coverage and good access to healthcare facilities are boosting the U.K. healthcare market, but increasing use of generics and government cost-cutting measures to reduce expenditure are restricting further growth, according to research and consulting firm GlobalData.

According to GlobalData’s report, the U.K. pharmaceutical market was worth $24 billion in 2012 and is forecast to reach $31.7 billion by 2020, at a Compound Annual Growth Rate (CAGR) of 3.5%. The segments that dominated the market in 2012 were central nervous system (CNS) drugs and cardiovascular and respiratory system drugs.

The medical device market also is forecast to grow from $12 billion in 2012 to $17.5 billion by 2020, at a CAGR of 4.8%. In 2012, the major market shares were ophthalmic devices ($1.4 billion), orthopedic devices ($1.4 billion), wound care management ($1.1 billion), cardiovascular devices ($1.1 billion) and drug delivery devices ($1 billion).

Joshua Owide, GlobalData’s director of industry dynamics, said, “With the availability of reimbursement, advances in medical technology and growing disease awareness allowing for early diagnosis, the U.K.’s medical device market is expected to grow significantly in the near future.”

However, increasing generic substitution and cost-cutting measures adopted by the British government and the National Health Service (NHS) have had a negative impact on market growth. The Department of Health announced plans to cut drug prices by 10% to 20% on approximately 10% of branded medicines not covered by the voluntary Pharmaceutical Price Regulation Scheme (PPRS).

“These price cuts will adversely affect the revenues of branded medicine manufacturers in the U.K. What’s more, generics are priced lower than patented drugs, which saw a decrease in the overall value of the U.K. pharmaceutical market,” said Owide.