U.S. drug spend grew by 6% in 2016, the lowest rate in two years
The number of blood-pressure prescriptions increased by 3.5% and accounted for 19% of all prescriptions in the U.S. in 2016, according to a new report.
The number of overall prescriptions written in 2016 jumped by 3%, driven in large part by the boost in prescriptions for hypertension drugs. The most dispensed blood-pressure drugs were two generics: ACE inhibitor lisinopril and beta blocker metoprolol.
The U.S. health system's spending on prescription drugs grew by 5.8% to $450 billion in 2016, the slowest growth rate over the last two years, according to an annual report released Thursday by the QuintilesIMS Institute. U.S. drug spend jumped 12% in 2015 to $425 billion, compared to 2014.
See also: U.S. drug spend jumped 12% in 2015
When accounting for rebates and other pricing concessions made by drugmakers, net spending was $323 billion in 2016 — up 4.8% compared to 2015.
Explaining the drop in growth rate, QuintilesIMS said the past two years were outliers: 2014 and 2015 were “atypical relative to the long-term trend,” the report's authors wrote. During those years, spending rates exploded, due to several factors, including broad use of expensive hepatitis-C drugs, like Gilead Sciences' Harvoni, fewer drugs losing patent protection, and higher price increases.
QuintilesIMS attributed slower growth rates in 2016 to fewer product launches and lower price increases for branded products whose patents have not yet expired. The FDA approved 22 new drugs in 2016 — a six-year low.
The growing role of payers as well as CEO price-hike pledges may be to blame for the downswing in drug price increases. Starting in mid-2016, the CEOs of AbbVie, Allergan, Takeda, and other drugmakers said they would limit price increases of their products to single digits. Those pledges came after a growing backlash to the repricing practices of Valeant Pharmaceuticals International and Mylan as well as the launch prices of some new drugs. In addition, payers have become increasingly restrictive about what drugs they will include on their formularies.
The Centers for Medicare and Medicaid said that prescription drug spending grew by 9% in 2015, compared to 2014's spending growth rate of 2014.
Specialty medicines continued to be a strong driver of net spending. Specialty drugs accounted for 42.6% of net spend last year, compared to a 23.6% share in 2007. Of the $895 that an average person spends on medicines in a given year, $384 is doled out for specialty drugs.
One bright spot for drugmakers: Out-of-pocket costs dropped for patients in 2016. The average out-of-pocket cost for all prescriptions dropped to $8.47 in 2016, from $8.84 in 2015.