Five Facts About U.S. Drug Spending

United States prescription drug spending declined in 2016, according to QuintilesIMS Institute research released in early May. While drug spending grew at a 4.8% pace in 2016 to $323 billion, that is less than half the growth rate of the previous two years, after adjusting for off-invoice discounts and rebates.

“After a year of heated discussion about the cost and affordability of drugs, the reality is that, after adjusting for population and economic growth, total spending on all medicines increased just 1.1% annually over the past decade,” said Murray Aitken, Senior Vice President and Executive Director of the QuintilesIMS Institute. “Understanding how the dynamics of today’s health-care landscape impact key stakeholders is more important than ever, as efforts to pass far-reaching health-care legislative reforms remain on the political agenda.”

Related article: Health Spending to Reach Nearly 20% of GDP in 2025

Here are the other top findings from QuintileIMS’s Medicines Use and Spending in the U.S. – A Review of 2016 and Outlook to 2021 report:

• The growth in cholesterol-lowering drug usage was only modest in 2016, in part because of relatively limited uptake for the newest generation of treatments, PCSK9s. “Both alirocumab [Praluent] and evolocumab [Repatha] have been used by relatively fewer patients, totaling fewer than 220,000 prescriptions in 2016, at least in part due to the strict conditions under which patients would be eligible for these newer drugs under insurer formularies,” QuintilesIMS said in the report. In fact, the price for some PCSK9s have been reported to be as high as $14,000 per year, compared to older and generic statins, which average 5 cents to 50 cents per day.

• Total prescriptions dispensed in 2016 reached around 4.5 million, an increase of 1.9%. Notably, long-term prescriptions with three-month duration have increased dramatically in the last two years. The largest drivers of prescription growth in 2016 were seniors, mostly due to population growth, but younger patients continued to increase their per capita usage of medicines under the Affordable Care Act (ACA). While the overall population of seniors in the United States has increased 19% since 2011, their average per capita use of medicines declined slightly-from 50 prescriptions per person in 2011 to 49 prescriptions per person last year.

• The late-phase research and development pipeline remains robust and will yield an average of 40 to 45 new brand launches per year through 2021. At the end of 2016, the late-phase pipeline included 2,346 novel products, a level similar to the prior year, with specialty medicines making up 37% of the total. More than 630 distinct research programs are underway in oncology, which account for one-quarter of the pipeline and where one in four molecules are focused on blood cancers. “While the number of new drug approvals and launches fell by more than half in 2016, the size and quality of the late-phase pipeline is expected to drive historically high numbers of new medicines,” QuintilesIMS said.

• Out-of-pocket costs for patients continued to decline in 2016, reaching $8.47 on average, compared to $9.66 in 2013. “Nearly 30% of prescriptions filled in 2016 required no patient payment, due in part to preventive treatment provisions under the Affordable Care Act, up from 24% in 2013,” the QuintilesIMS statement said. “The use of co-pay assistance coupons by patients covered by commercial plans also contributed to the decline in average out-of-pocket costs, and were used to fill 19% of all brand prescriptions last year-compared with 13% in 2013.”