Managed Care


Slowdown in prescription drug spending won't last

MANAGED CARE November 2013. © MediMedia USA
Managed Care Outlook

Slowdown in prescription drug spending won't last

Spending on prescription drugs will rise more steeply in a couple of years, with researchers predicting an average annual 6.5% increase between 2015 and 2022, according to a study in the October issue of Health Affairs.

The study, from the Centers for Medicare & Medicaid Services, notes that this is a significant change from what’s been going on lately. “In 2012 prescription drug spending is estimated to have accounted for $260.8 billion in health spending — a decline of 0.8% and down from 2.9% growth in 2011.”

The authors attribute the slowdown in part to brand-name drugs losing patent protection and in part to increased use of generics.

“In 2014, prescription drug spending growth is projected to accelerate to 5.2%, driven by increases in the use of prescription drugs by people who are newly insured and those who move to more generous insurance plans.” The spending is expected to rise “as the economy improves and the impact of patent expirations continues to diminish.”

Those growth in the newly ­insured is a result of the Affordable Care Act, whose effect the authors also measure, though they admit that much remains uncertain.

“The supply-side effects of the Affordable Care Act, such as changes in providers’ behavior in reaction to an influx of newly insured patients, remain highly speculative and are not included in these estimates.”

Prescription drugs’ share of GDP

2014 growth rates by sector

Source: “National Health Expenditure Projections, 2012–22: Slow Growth Until Coverage Expands And Economy Improves,” Health Affairs, October 2013


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