U.S. drug spend jumped 12% in 2015

Photo credit: Bill Brooks/ Creative Commons

U.S. spending on medicines increased by double digits for the second straight year to $425 billion in 2015 — up 12.2% from $378.6 billion in 2014 — according to the IMS Institute for Healthcare Informatics.

After adjusting for estimated rebates and price concessions from manufacturers, drug spending rose 8.5% over 2014.

The sharp increase was largely driven by spending on specialty drugs as well as new brands — defined as drugs that have only been available in the U.S. for less than two years. Half of the total spending growth in 2015 came from new brands.

Specialty medicines generated $150.8 billion of the $425 billion of total drug spending in 2015. The IMS Institute defines specialty medicines as “products that are often injectable, high-cost, biologics, or require cold-chain distribution.”

In the past five years, the IMS Institute found that spending on specialty medicines doubled, contributing to 70% of overall medicine spending growth between 2010 and 2015. That hike was driven by increased expenditures for drugs that treat hepatitis, autoimmune diseases, and oncology. Oncology spending was up 18% in 2015, reaching $39.1 billion.

That overall increase in spending was felt by patients, who saw their average costs rise significantly this year. The average cost of a brand prescription — filled through a commercial insurance plan — has increased by more than 25% since 2010, reaching $44 per prescription in 2015. The average cost for a generic prescription remained at $8 in 2015. Spending on generics overall reached $114.1 billion in 2015, an increase from $7.9 billion in 2014.

While spending jumped, the total prescriptions dispensed in 2015 only rose by 1% — there were a total of 4.3 million prescriptions written in the U.S. last year. Demand for antidepressants and diabetes treatments was roughly 10% higher in 2015 than in 2014.

The mix of professionals writing those prescriptions has also changed. IMS found that prescriptions written by “non-physician practitioners,” like nurse practitioners and physician assistants, more than doubled over the past five years. These practitioners doled out 676 million prescriptions in 2015.

The IMS Institute predicts that drug spending will increase by 46% over the next five years, driven by new, innovative products. That rise will be offset, in part, by  the loss of patent exclusivity for some once top-selling drugs.



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