DANBURY, Conn. & RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)-- Growth in U.S. spending on prescription medicines fell in 2016 as competition intensified among manufacturers, and payers ramped up efforts to limit price increases, according to research released today by the QuintilesIMS Institute. New medicines introduced in the past two years continue to drive at least half of total spending growth as clusters of innovative treatments for cancer, autoimmune diseases, HIV, multiple sclerosis, and diabetes become accessible to patients. The prospects for innovative treatments over the next five years are bright fueled by a robust late-phase pipeline of more than 2,300 novel products that include more than 600 cancer treatments. U.S. net total spending is expected to increase 2-5 percent on average through 2021, reaching $375-405 billion.
Drug spending grew at a 4.8 percent pace in 2016 to $323 billion, less than half the rate of the previous two years, after adjusting for off-invoice discounts and rebates. The surge of innovative medicine introductions paused in 2016, with fewer than half as many new drugs launched than in 2014 and 2015. While the total use of medicines continued to climb—with total prescriptions dispensed reaching 6.1 billion, up 3.3 percent over 2015 levels—the spike in new patients being treated for hepatitis C ebbed, which contributed to the decline in spend. Net price increases—reflecting rebates and other price breaks from manufacturers—averaged 3.5 percent last year, up from 2.5 percent in 2015.
“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 percent 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 healthcare landscape impact key stakeholders is more important than ever, as efforts to pass far-reaching healthcare legislative reforms remain on the political agenda.”
In its report, Medicine Use and Spending in the U.S. – A Review of 2016 and Outlook to 2021, the QuintilesIMS Institute highlights the following findings:
The full version of the report, including a detailed description of the methodology, is available at www.quintilesimsinstitute.org. The study was produced independently as a public service, without industry or government funding.
In this release, “spending on medicines” is an estimate of the amount received by pharmaceutical manufacturers after rebates, off-invoice discounts and other price concessions have been made by manufacturers to distributors, health plans and intermediaries. It does not relate directly to either the out-of-pocket costs paid by a patient, except where noted, and does not include mark-ups and additional costs associated with dispensing or other services associated with medicines reaching patients. For a fuller explanation of methods to estimate net spending, see the Methodology section of the report.
About the QuintilesIMS Institute
The QuintilesIMS Institute provides key policy setters and decision makers in the global health sector with unique and transformational insights into healthcare dynamics derived from granular analysis of information. It is a research-driven entity with a worldwide reach that collaborates with external healthcare experts from across academia and the public and private sectors to objectively apply the company’s proprietary global information and analytical assets. More information about the QuintilesIMS Institute can be found at: www.quintilesimsinstitute.org.
QuintilesIMS (NYSE:Q) is a leading integrated information and technology-enabled healthcare service provider worldwide, dedicated to helping its clients improve their clinical, scientific and commercial results. Formed through the merger of Quintiles Transnational and IMS Health, QuintilesIMS’s approximately 50,000 employees conduct operations in more than 100 countries. Companies seeking to improve real-world patient outcomes through treatment innovations, care provision and access can leverage QuintilesIMS’s broad range of healthcare information, technology and service solutions to drive new insights and approaches. QuintilesIMS provides solutions that span clinical to commercial, bringing customers a unique opportunity to realize the full potential of innovations and advanced healthcare outcomes.
As a global leader in protecting individual patient privacy, QuintilesIMS uses healthcare data to deliver critical, real-world disease and treatment insights. Through a wide variety of privacy-enhancing technologies and safeguards, QuintilesIMS protects individual privacy while managing information to drive healthcare forward. These insights and execution capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders in the development and approval of new therapies, and to identify unmet treatment needs and understand the safety, effectiveness and value of pharmaceutical products in improving overall health outcomes. To learn more, visit www.QuintilesIMS.com.
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