Print“ On the eve of the most transformative period in U.S. healthcare, understanding the drivers of this cost-curve reduction is critical to effectively addressing the long-term implications.”
Patent expirations on top selling drugs led to a 3.5 percent annual decline in total U.S. drug spending in 2012 as patients accessed lower-cost generic versions and real per capita spending on drugs fell to $898. It was the first time that per capita spending on drugs fell, according to a new report.
The report from IMS Institute for Healthcare Informatics also found that healthcare services overall fell for the second year in a row. The decline in healthcare services reflected fewer patient visits to office-based physicians, fewer non-emergency admissions to hospitals, and outpatient facilities, and a less severe flu season in the early part of 2012, the report said.
Healthcare costs remain concentrated among relatively few patients suffering from multiple chronic conditions, cancer, or other specialty diseases, IMS says. Among commercially insured people under 65 years of age, 5 percent of this group incurred 51 percent of total healthcare costs by using more than $15,684 of healthcare services per person in 2012.
Patients with insurance paid higher deductibles, co-pays and co-insurance for their overall healthcare, but prescription drug co-pays for most patients declined. At the same time, new transformative medicines became available to treat a large number of diseases with small or strictly defined patient populations.
“The cost curve for medicines was clearly bent in 2012, for better or for worse,” says Murray Aitken, executive director, IMS Institute for Healthcare Informatics. “To some extent, this is a harbinger of more efficient use of our healthcare resources, but it also reflects a decline in utilization that may be the result of under-treatment and an imbalance between prevention and care. On the eve of the most transformative period in U.S. healthcare, understanding the drivers of this cost-curve reduction is critical to effectively addressing the long-term implications.”
Lower cost generics now account for 84 percent of all prescription drugs. While there was also lower spending on recently launched drugs, spending on new specialty medicines increased dramatically with these products driving nearly two-thirds of 2012 total new brand spending. The five largest drivers of new specialty product spending included Incivek for hepatitis C, Eylea for wet age-related macular degeneration, Xgeva for bone metastases in cancer, Gilenya for multiple sclerosis, and Yervoy for inoperable or metastatic melanoma.
Although generic drugs accounted for 84 percent of total U.S. prescriptions in 2012, they made up only 28.5 percent of costs. That leaves payers looking to the remaining 16 percent of prescriptions to squeeze savings out of 71.5 percent of total drug spending in the United States.
Specialty pharmaceuticals represent nearly 40 percent of branded prescription drugs and are growing. What that likely means is that as payers seek to find new ways to cut spending, they will view specialty drugs as a likely place to focus their attention.
May 10, 2013
http://www.burrillreport.com/article-patent_expirations_help_cut_drug_spending_in_2012.html
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