Report: 2014 Rx Spending Hit Highest Single-Year Increase in 13 Years
U.S. prescription drug spending increased by 13% from 2013 to 2014, to $374 billion, marking the largest single-year increase since 2001, according to a new IMS report, Reuters reports (Berkrot, Reuters, 4/14).
According to IMS, more than $11 billion of the increase was for new hepatitis C treatments, driving the overall prescription drug spending increase (Pfeifer, Los Angeles Times, 4/14). IMS noted that more than 161,000 individuals began taking Gilead Sciences' new hepatitis treatments -- including Sovaldi and Harvoni -- in 2014. About 17,000 people started treatment in 2013. The products have high cure rates and few side effects, but Gilead has received criticism for the $1,000-per-pill cost of Sovaldi.
The researchers noted that other factors that contributed to the increase were:
- Demand for newer cancer and multiple sclerosis treatments;
- Price hikes on branded drugs; and
- The introduction of relatively few new generics for top-selling branded medications.
New generics helped bring down spending by about $12 billion last year, which is less than in previous years, according to the report. By comparison, generics helped bring down spending about $20 billion in 2013 and by about $29 billion in 2012.
The researchers also noted that 18 costly "orphan drugs" -- used to treat rare diseases -- entered the market in 2014 (Reuters, 4/14).
Overall, new drugs accounted for $20.3 billion of prescription spending (Los Angeles Times, 4/14).
IMS Institute for Healthcare Informatics Executive Director Murray Aitken said that his organization expects growth in both prescription drug market size and spending in 2015, but not at the 2014 level (Reuters, 4/14).
New Medicaid Beneficiaries Filling Prescriptions
Meanwhile, the report also found that Medicaid beneficiaries helped drive an overall increase in prescription drug use, while people with private coverage filled fewer prescriptions, the New York Times reports (Thomas, New York Times, 4/14).
The researchers found that Medicaid beneficiaries filled 17% more prescriptions in 2014 than in 2013 (Reuters, 4/14). According to the report, the percentage increase in the number of prescriptions filled by Medicaid beneficiaries was:
- 25.4% in states that expanded Medicaid; and
- 2.8% in states that did not.
Sabrina Corlette, a senior research fellow at the Center on Health Insurance Reforms at Georgetown University, said the difference "suggests that in the Medicaid expansion states, people are accessing the health care system." She added, "They are seeing physicians and other prescribers and getting needed drugs" (New York Times, 4/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.