The IQVIA Institute for Human Data Science recently released a report focused on net spending on medicines in the United States in 2017, with an outlook to 2022. The report notes that spending on medicines grew less than one percent in 2017 – just a mere 0.6 percent.
The report further found that the level and growth of spending, the price of new and old drugs, and the allocation of costs among patients, employers, health plans, intermediaries, and state and federal agencies, all “command great attention,” and therefore, the report aims to provide an “objective measure of medicine use” and the cost prescriptions have on our healthcare system.
Total spending on medicines grew by 0.6% in 2017, after off-invoice discounts and rebates. This includes all types of medicines, including institutional use for inpatients and outpatients. If we were to solely focus on retail and mail-order pharmacy distribution, net spending actually declined by 2.1%.
Further, if we were to adjust for manufacturer discounts and rebates, as well as economic and population growth, medicine spending also declined, on a per capita basis, by 2.2% in 2017. Overall, medicine spending has tended to shift from traditional treatments to specialty medicines.
Interestingly, the report states that pharmacy prices for brand prescriptions increased by 58% over the past five years while the final out-of-pocket costs for all prescriptions declined by 17%. This is a perfect illustration of how complex the dynamics are when it comes to determining how much patients pay for their medicines and the influence the costs have on whether or not they get their prescriptions filled.
As noted above, also included in the report was an outlook for the next five years, to 2022. It is expected that there will be two to five percent net spending growth, with one to four percent growth in retail and mail-order prescription drugs. The growth will be driven primarily by the ever-growing number of new medicines, which tend to be specialty and orphan drugs, and will be offset by the impact of losses of brand exclusivity.
Opioids are a hot topic of discussion and the report would have been remiss to not mention them. According to the report, prescription opioid volume peaked in 2011 at 240 billion milligrams of morphine equivalents and have declined 29% to 171 billion in 2017. The report notes that 2017 was the “largest single year change,” when the decline was 23.3 billion morphine milligram equivalents, or 12.0%.
When we look at per adult statistics, prescription opioid usage was about 22 pills per adult in 1992 and rose to a peak of 72 pills in 2011. Usage has since declined to 52 pills per adult. The report believes that decreases in prescription opioid volume have been driven by changes in clinical usage, which have been influenced by regulatory and reimbursement policies and legislation including the FDA Opioid REMS program.
New drug launches more than doubled in 2017 from 2016. Forty-two new active substances (NAS) were launched, with 21 for rare diseases and 14 for cancer. This number is not only more than double 2016 numbers but is also higher than all but two of the last ten years. Significant shifts in the regulatory process are becoming apparent, as 19 drugs received a breakthrough designation and 18 included patient-reported outcomes as part of their approved label from FDA.
According to the report, an estimated 40 to 45 new medicines are expected annually for the next five years, with 15 to 20 of those per year being orphan drugs.
The full report can be found here.