According to a report from the IMS Institute for Healthcare Informatics, total spending on prescription drugs in the US rose 12.2 percent to nearly $425 billion in 2015, driven by the launch of new medicines for cancer and hepatitis C, as well as price increases for older products. The annual growth rate was below the 14.2-percent rise seen in 2014, although the report predicts that spending will continue to increase at a steady mid-single-digit rate through 2020.
"Drug spending growth remains at historically high levels, even as it's moderated from 2014," remarked Murray Aitken, executive director of the IMS Institute. "A surge of new drugs being approved and becoming available for patients is a driver of increased costs," Aitken added. IMS estimates that US spending on prescription drugs will reach between $610 billion and $640 billion in 2020.
The report indicated that last year, more than half of the spending growth came from drugs approved within the past two years, with specialty medicines, such as those for hepatitis C, cancer and multiple sclerosis, accounting for $151 billion of the total, an increase of 20 percent from 2014. IMS noted that while 250 000 patients were treated last year with the new generation of hepatitis C therapies from Gilead Sciences, AbbVie and Merck & Co., up from 170 000 in 2014, the number of people starting treatment slowed as the year progressed. According to IMS, this suggests that many of those most in need of the medicines may have received them.
The analysis also found that pharmaceutical companies offered price concession and rebates totalling $115.3 billion in 2015, more than double the $52.4 billion offered in 2009. IMS estimated that after rebates and other price discounts, drugmakers received $309.5 billion for US prescription medicines last year, up 8.5 percent from 2014, but down from growth of 10.5 percent in the prior year. "For all the headlines, drug spending growth has moderated in 2015," Aitken commented.
According to IMS, the average net price increase for branded drugs was 2.8 percent in 2015, versus 12.4 percent using wholesale prices. "That reflects the new dynamics in the marketplace, where we have heightened competition in several major therapy areas, including diabetes, with manufacturers taking price concessions through rebates," said Aitken. Meanwhile, spending on branded drugs facing new generic medicines fell $14.2 billion in 2015, versus a decline of $32.6 billion in 2012.
Commenting on the report, the Pharmaceutical Research and Manufacturers of America said that the findings confirm that drug costs are moderating "due to a competitive marketplace for medicines where large, powerful purchasers negotiate aggressively and generic utilisation rates are nearly 90 percent."
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