Drug spend will continue to rise through 2023
The numbers folks at the Centers for Medicare and Medicaid Services anticipate sluggish growth in US healthcare spend between now and 2023. CMS says the slow growth will average around 5.7%, compared to the relatively go-go era of 1998 to 2008 when growth averaged around 7.2%.
The reason for the slowdown: the US is still digging out from the most recent recession, sequestration and an uptick in cost-sharing plans among privately insured patients, which means more patients have higher medical costs.
The prescription drug category, however, is among the more robust categories, and CMS's Office of the Actuary anticipates that once all the numbers are in they will show last year's prescription drug spend grew 3.3% over 2012 and that 2014 will show patients spent 6.8% more than they did in 2013. CMS also expects drug expenditures to climb by around 6.4% in 2015 and that spending will grow by an average of between 5.4% a year between 2016 and 2019, and that this will then be followed by an average annual growth of around 6% between 2020 and 2023.
Several forces contribute to this projected trend (greater disposable income doesn't kick in until around 2020), including the larger patient pool that comes along with the Affordable Care Act's increased insurance coverage. This newly insured group does more than add headcount: CMS says patients with marketplace insurance plans are “experiencing greater use of drugs in several therapy classes, including higher use of specialty drugs.” New hepatitis C drugs—a specialty medication—got an individual shout-out as being one of the pricier medications these new patients are expected to embrace.
The IMS Institute for Healthcare Informatics did not associate healthcare reform with its expectation that specialty medications would account for an increasing percentage of healthcare costs, but its November projections run along the same track, showing more patients using more medications.