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Drug Spending Growth Hits 2%

MANAGED CARE May 2011. © MediMedia USA
News and Commentary

Drug Spending Growth Hits 2%

MANAGED CARE May 2011. ©MediMedia USA

The IMS Institute for Healthcare Informatics reported a 2.3 percent increase in spending on prescription medications in 2010. That is markedly lower than the rate reported in 2009 — 5.1 percent. The total dollars spent on medications reached $307.4 billion last year — or real per capita spending of $898, up $6 from 2009.

The overall volume of prescription medications consumed reached historically low levels in 2010. Findings were reported in IMS’s The Use of Medicines in the United States: Review of 2010.

The report says commercial third-party insurers were used by patients to pay for 63 percent of dispensed prescriptions, down from 66 percent five years ago. The number of prescriptions filled under a Medicare Part D plan totaled 871 million, or 22 percent of the total. The average patient copayment was $10.73 in 2010, down 20 cents from 2009 because of greater use of generic medications.

Comparing spending for 2010 and 2009 reveals that protected brands, which historically have caused volume-based increases in spending, saw a volume-based decline.

Increased spending because of price levels of protected brands was $16.6 billion in 2010, but this was partially offset by rebates, to the tune of $4.5 billion.

The report says total spending on new brands has declined in the last five years, even as newly launched products brought significant new therapy options to patients. Brands that in the prior year had sales of $32.1 billion were exposed to generic competition in 2009 and 2010, the highest two-year total ever.