US prescription drug spending forecasted to reach US$610 bn by 2021
US spending on prescription drugs is expected to rise by 4-7% through 2021, reaching US$580 to US$610 billion, according to a report released by Quintiles IMS Holding, lowering its previous forecast.
Drug makers are facing increasing pricing pressure and competition in the market. In addition, 2016 saw fewer new medicines being approved than prior years. These prompted Quintiles IMS, which compiles data for the pharmaceutical industry, to lower its forecast average spending growth from 6-9%to 4-7% through 2021.
Taking likely manufacturer discounts and rebates into account, spending would grow 2-5% to US$375 billion to US$405 billion in 2021, as net price increases for patent-protected branded drugs slows, the report said.
Under pressure from politicians and insurers over the cost of many branded medicines, several drug makers have pledged to limit annual price hikes to under 10%.
“We’re forecasting moderation in pricing reflecting what … we expect will be a continuing trend of single-digit price increases,” said Murray Aitken, executive director of the QuintilesIMS Institute which compiled the report.
As several big-selling prescription drugs lose patent exclusivity and more biosimilars – less expensive versions of expensive biotech medicines – enter the market, the expanded use of cheap generics will also offset some of the expense of new medicines.
The US Food and Drug Administration (FDA) approved just 22 new medicines last year, down from 45 in 2015, which will also contribute to lower spending growth this year and next, the report said.That is seen picking up in 2019 and beyond as Quintiles IMS estimates 40 to 45 new brand launches per year through 2021 based on a review of experimental medicines in drug maker pipelines.
The report found more than 2,300 novel products in later stage development, including more than 600 drugs for cancer, which remain able to command very high prices.”Numbers (of approvals) are already running well ahead of where they were a year ago,” Aitken said.
US spending on prescription medicines in 2016 increased by 5.8% over 2015 levels to US$450 billion based on list prices, and by US4.8% to US$323 billion when adjusted for discounts and rebates.
The biggest drivers of prescription growth came from large chronic therapy areas, such as hypertension and mental health.
Overall use of pain medicines declined 1% with restrictions on prescribing and dispensing becoming more common as healthcare providers attempt to address the growing epidemic of addiction to opioid pain drugs.
Category: Features, Pharmaceuticals
